Big banks are returning to Silicon Valley seeking innovation rather than profits—though that would be nice, too. Evelyn M. Rusli reports in DealBook that multinational corporations, many of which are financial services companies, are picking up office space across Silicon Valley in order to stay close to the heart of innovation.

“We are in one of the most regulated and risk-averse industries in the world, so innovation doesn’t come naturally to us,” Jay Reinemann, the head of [Banco Bilbao Vizcaya Argentaria, the large Spanish banking group,] tells DealBook. “We want to avoid the video-rental model. We want to evolve alongside our consumers.”

Wary of placing big bets on startups with uncertain futures, banks are making smaller, more strategic investments this time around. Citi Venture, a Citigroup unit, invested in an online exchange for gift cards called Plastic Jungle, as well as an online credit card scanner called Jumio. American Express opened an office in Facebook’s old digs in downtown Palo Alto, and built a team of Silicon Valley veterans to meet with potential startups—roughly 300 in the last six months.

The connections have started to pay off. Vinod Khosla, the head of Khosla Ventures and a co-founder of Sun Microsystems, introduced the American Express team to the executives at Ness Computing, a mobile start-up. In August, American Express partnered with Singtel, the Singapore wireless company, to invest $15 million in Ness.

The benefit to startups of partnering with banks is clear. Banks, still smarting from failed Silicon Valley ventures in the past, invest with care. They’re not looking for the quick financial turnaround, but rather the benefit of the Valley’s culture of innovation. With the collapse in stock price of the formerly high-flying startups Zynga, Groupon, and Facebook, the optimism about new startups is tinged with caution. This time around, banks are leveraging local expertise to identify smarter investments more in line with their strategic goals.