ATLANTA — Any new idea incubated within a bank should have a measurable benefit to customer experience.

That was the message last week from Dominic Venturo, chief innovation officer at U.S. Bank.

Venturo said the bank, which is headquartered in Minneapolis and has about $467 billion in assets, considers three criteria when launching any new innovation effort: does it improve customer experience; add incremental revenue; and enhance the company’s bottom line. 

“If you ignore the market forces and the product-market fit, you can spend a lot of time doing something that’s not going anywhere,” he said.

Venturo leads a 36-member team with expertise on everything from product development to engineering. Venturo, who has been US Bank’s CIO for 12 years, the longest tenure of any chief innovation officer at a major bank in the US, spoke at Bank Innovation Build here, about the bank’s internal development processes, its work with startups and the state of 5G as it applies to financial services. Below is a summary of his comments, which have been edited for clarity. 

How do you create an infrastructure that’s amenable to partners?
Part of it is modern technology roadmaps, and the other part is looking at those [companies] that connect to us already and seeing where we have the ability to make those processes more efficient.

You have to have the infrastructure, you also have to build products and APIs, and then you have to test your product in the market with companies that are actually going to use these things. In our early days, we did hackathons partly so we could understand what the ecosystem wanted to build. But more importantly, we learned that our early documentation wasn’t very good, and our early APIs weren’t very helpful. You bring in developers and entrepreneurs, and they actually hammer away at your system. You learn a lot.

How does your innovation teamwork with the other product developers at the bank?
The innovation team works on early-stage research and development. We’ll do iterations, prototypes and testing. We might build a pilot version of a product. When we do that, the product might get into employees’ and customers’ hands. Once you get through the pilot and you have your business case, the business line puts it into their prioritization for delivery. The timeline for that is going to vary.

How do you add ideas from outside the bank?
We developed an innovator-in-residence program where we bring individuals in who have an idea or a problem. We once had a business owner come to us and say a lot of money in the corporate payment space gets put on personal credit cards. Through the innovator-in-residence program, we helped solve that problem.  The end result is Expense Wizard. You email employees a link, they download an app and provision a virtual card to the app. Every transaction is automatically categorized [and] intelligence builds an expense report. At the end of the trip, the employee pushes ‘complete trip’ and it files an expense report. 

What are some of the challenges of working with startups?
Startups, especially when they are early-stage companies, need to be super focused on their mission. Sometimes, we’ll talk to a company and they’ll tell us what they are trying to do. We might tell them, “That’s really cool, but what we really want is this.”

It takes a lot of strength for them to say “nope,” especially when the fifth-largest bank in the country is telling you it really wants something. Sometimes we just give them feedback, and they may decide to modify it.

You’ve spoken with Bank Innovation in the past about 5G’s potential. How do you see 5G influencing banking in coming years?
In 2020, not a lot. To be honest, when you look at the commercialization of 5G, it doesn’t have significant scale in 2020. The infrastructure is still coming online [and] it doesn’t go through walls very well. It will take more antennas but better communication. But when you get there, you can stand up an ATM, branch or corporate office without all the landlines. It’s a time and money saver.