A Practical Guide to Innovation: One Bank's Journey. Dominic Venturo Chief Innovation Officer U.S. Bank

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1 A Practical Guide to Innovation: One Bank's Journey Dominic Venturo Chief Innovation Officer U.S. Bank

2 U.S. Bancorp 3Q14 Asset Size $391 billion Deposits $273 billion Loans $246 billion Customers 17.9 million NYSE Traded USB Market Capitalization* $73 billion Founded 1863 Bank Branches 3,177 ATMs 5,026 Page 2 * As of October 21, 2014

3 U.S. Bank Business Mix Wealth Management and Securities Services Wholesale Banking and Commercial Real Estate Payment Services Consumer and Small Business Banking Retail Payment Solutions Elavon Corporate Payment Services 2013 FY taxable-equivalent Page 3

4 Eight Years Ago We had a challenge Page 4

5 INNOVATION Page 5

6 Creativity is thinking up new things. Innovation is doing new things. Theodore Levi+ Page 6

7 Innovation is people putting ideas into valuable action Page 7

8 Innovation Mission To discover, test, and assist in commercialization of new banking and payment solutions: Support business lines in emerging technology adoption for Horizon One businesses Seed new Horizon Two and Three revenue streams Incubate and grow emerging businesses. VALUE Horizon 1 Defend and extend current core business Horizon 2 Build momentum and emerging new businesses Horizon 3 Create options for future businesses TIME Page 8

9 Page 9 OK, but how?

10 Our [current] Approach Dedicated team for emerging technologies and markets Develop, Pilot, and Refine within Payments Innovation and with business partners where appropriate Transfer/Transition to core product groups once proven Page 10

11 Innovation Framework Helping customers solve problems Providing new value chains for the payments business GROW Payment Accounts/ Access Enabling Technologies Value Exchange Information Page 11

12 Characteristics of an Innovator Page 12

13 Innovator Characteristics Expert Creative Collaborative Inquisitive Life Learner Willing to Try Tenacious Page 13

14 Support Cultural Transformation Page 14

15 Training Across Disciplines Page 15

16 Creates a Network of Resources and Common Culture Support Page 16

17 Why Fail Fast?

18 After Training Ongoing Engagement and Governance 1. Monthly Business Updates 2. Bi-monthly Innovation Principals Meeting 3. Quarterly Executive Review 4. Annual Plan Review With Business Leaders 5. Annual Performance Reviews Innovation is a category for all leaders 6. Ongoing Training (commit to n / quarter) Page 18

19 Process and Support Changes Requires support across the organization Rapid prototype development for concept testing and iterative design Comprehensive UX support for web and mobile development across business lines Lab support for testing new technologies Technical SMEs assigned early Improved ability to find and assess non-bau concepts Alternative approach to vendor sourcing Consistent method of presenting concepts/ideas Page 19

20 Results? Broad support across the organization Capability to deliver self-contained pilots to market in four months or less Integrated pilots take longer, but not much Pilot to production still varies with scale and complexity 40+% of projects are implemented or on track to be implemented Centralized sharing library of ideas, research and results Centralized sharing library of tools for every phase of the development cycle Page 20

21 Payments Innovation Timeline Real-Time SMS Account Alerts AccelaPay Mobile App Visa Mobile Payments App Pilot Launched Virtual Merchant Mobile FlexPerks Contactless & EMV Card REI iphone Credit Card App JANUARY NCR Silver Launched FEBRUARY Travel VirtualPay APRIL Nina Voice Control Pilot MARCH Video Expert MAY FindUS Offers Pilot CPS app pilot Twins DL Scan 2008 I 2009 I 2010 I 2011 I 2012 I 2013 I 2014 Visa Money Transfer Pilot Internal Mobile Payment Sticker Pilot Utah Debit Card Instant Issuance ShopText Pilot Visa Mobile Offers on Android Visa Targeted Acceptance MARCH Retailer ipad App MAY V.me Wallet Support OCTOBER The Grove NOVEMBER Peri mcommerce Pilot DECEMBER Go Mobile Launch JUNE Square Wallet Support AUGUST Bar Code Payment Pilot SEPTEMBER Merchant Instant Decision Voice Biometrics Pilot SEPTEMBER Kroger Visa Mobile OCTOBER Corporate Mobile NOVEMBER Apple Pay Page 21

22 Enabling Secure Commerce Awareness Search & Evaluation Decision & Purchase Context/Location Loyalty & Experience Trigger Offers Page 22

23 Find US Offers Pilot Illustra2ve offer loca2ons. Company names do not imply endorsement or par2cipa2on. Page 23

24 Mobile Account Acquisition Apply for credit card via mobile app on phone, or via Store Associate with ipad Instant approval Virtual card issuance Piloting Driver License OCR Page 24

25 Future: Voice Technology Technology POCs with Nuance voice solutions Voice Control/Navigation What is my balance? When is my payment due? Pay $100 on my credit card from checking. Voice Biometrics Vocal passphrase Page 25

26 Future: Peri mcommerce enabled A mobile commerce solution for activating media and purchasing via print, radio, and TV Page 26

27 Key Take Aways Up Front Develop a framework Train necessary staff Change processes where needed Develop insight methodology Ongoing Page 27 Remove barriers to innovation Communicate broadly and frequently Support challenges, contests, and campaigns Find out what works for your firm Share successes as well as failures Innovate your innovation process

28 Innovation Takes Leadership We are the authors of our own stories Page 28

29 Innovation is sometimes risky. You have to be willing to imagine what if and try new things, or challenge the status quo it takes courage Page 29

30 A Practical Guide to Innovation: One Bank's Journey Dominic Venturo Chief Innovation Officer U.S. Bank