U.S. Bank is looking to fintechs to provide back-office management for its small-business clients. 

The $669 billion bank listens to feedback from business clients to understand what they are looking for and whether to develop solutions in house or team with a third party, Shruti Patel, chief product officer for business banking, told Bank Automation News.

“If it is a core business function, we prefer to develop it on our own,” Patel said. However, working with a fintech makes the bank faster to market and gives it the ability to experiment, she said. 

“Certain products, like money movement” solutions, are usually developed and owned by U.S. Bank, Patel said, but there are “a few fintechs who are doing [customer experience] better than us, and that’s where we will partner up.” 

Banks are increasingly looking to partner with innovative fintechs for a better customer experience, Patel said. Fintechs are also relying more on bank partnerships because that’s where the scale and distribution is, she said. 

“I think it’s becoming less of a competition and more of almost a symbiotic relationship, because of that scale and distribution versus the speed to market, disruptive technology and better customer experience,” Patel said. 

Integrated tech 

The Minneapolis-based bank prioritizes its digital banking experience in payments and business management solutions for small and medium-sized businesses, Patel said. 

U.S. Bank has acquired and integrated the following fintechs’ offerings since 2021: 

• Expense and travel management solution provider TravelBank; 

• Small-business payments provider Bento; and 

• Point-of-sale data and analytics solutions provider talech.  

Investment strategy 

As the bank identifies tech providers to integrate, it also considers investment opportunities, Patel said. 

U.S. Bank evaluates fintech investment based on the following criteria: 

• Value proposition; 

• Market strength; and 

• Ability to address its client base. 

Many venture capital firms such as BankTech Ventures also pay attention to fintechs that can add to financial institution offerings, Carey Ransom, managing director of BankTech Ventures, previously told BAN. 

U.S. Bank doesn’t invest in fintechs unless the businesses have synergies, Patel said. 

Early-bird registration is now available for the inaugural Bank Automation Summit Europe 2024 in Frankfurt, Germany, on Oct. 7-8! Discover the latest advancements in AI and automation in banking. Register here and apply to speak here.