February 21

As US Bank moves its apps to Microsoft’s cloud, it’s dedicated to upskilling all its tech workers through a cost-effective training strategy that takes advantage of grassroots enthusiasm and talent.  

US Bank has tapped a small group of internal advocates to spread the gospel of the cloud among their coworkers.  

The bank, which committed $600 million to moving 1,300 apps to Microsoft’s Azure cloud, wants all its 7,000 technology employees to get cloud-certified over the next two years, and, to get there, it’s given support to several dozen volunteer coaches to train their peers, according to a feature in American Banker.  

Over six months last year, 30 volunteers guided 1,200 people to complete a certification. Each cohort spent 70 to 80 work hours over six weeks with a blend of employee coaching and Microsoft-provided classes. It intends to continue this strategy to train its entire team.  

US Bank’s approach is “very fintech-y,” according to PwC banking lead Peter Pollini: “Teams collaborating together and saying, ‘Hey, there’s a problem. Let’s now shift as a team and figure out how we can solve that problem together.’ That’s not the way that you would necessarily think of a bank upskilling their talent in the past.” 

As US Bank makes the transition to the cloud, it needs its existing workers to be knowledgeable and well-equipped for its new reality. And it aims for the process – dubbed Certfest – to feel “inspiring,” according to US Bank head of enterprise architecture Madhu Rao: “We have created an ecosystem where we are shopping within our closet to look for people that are already experts, and then we are providing them the opportunity to go and impact people.” 

Involvement with crypto is spooking banks, but digital assets more generally remain attractive: Banks are still interested in letting their clients issue, transfer, settle, and safekeep tokenized equities, and startups are jockeying to provide infrastructure. 

Digital asset infrastructure firm Taurus has raised a $65 million Series B led by Credit Suisse, with participation from Deutsche Bank, Arab Bank Switzerland, and others.  

Taurus’ platform is built to issue, custody, and trade any digital assets, including tokenized assets and digital currencies, and its funding highlights how cryptocurrency’s issues haven’t dampened all blockchain-based projects. As Bain’s Thomas Olsen put it to Distilled recently: “Large financial institutions are seeing a window of opportunity” for Web3 this year because of crypto’s problems. 

Taurus says it works with more than 25 financial institutions and corporate clients, including Credit Suisse. 

Credit Suisse expects “to soon launch several digital asset services for clients both on the issuing and the investment side,” exec André Helfenstein said.  

Taurus cofounder Lamine Brahim tells Insights Distilled that one of Taurus’ advantages is that it’s regulated – its T-DX platform for trading tokenized securities obtained a license from Swiss regulator FINMA in 2021 – and that its platform’s tech stack allows it to execute quickly: 

“Taurus controls the full technology stack – software, hardware, cryptography, distributed systems – where others assemble,” Brahim said.  

It plans to use the fundraising to fuel international expansion. Meanwhile, Citi, BBVA, BNP Paribas, and DBS work with infrastructure firm Metaco, while State Street has a partnership with Copper.

AmeriSave’s story offers a case study on how companies clamoring to integrate AI run into the reality that successful projects take significant time and investment – and they need to prioritize carefully. 

The CIO of AmeriSave – one of the largest privately owned mortgage lenders in the US – can’t keep up with all the requests for AI apps within the company.  

While the proffered ideas would tackle various cost issues, Magesh Sarma has seen firsthand that building machine learning algorithms isn’t quick’n’easy. CIOs need to be judicious in selecting projects that will drive significant business value, and use past experiences to resist the temptation to say yes to every request. 

For example, Sarma’s team spent $20 to $30 million each year for several years building one complex algorithm to perform some parts of the loan-underwriting process, according to The Wall Street Journal. Ultimately, it helped AmeriSave fund $24.2 billion in loans, up from $1.86 billion just two years earlier.  

That’s a big reward, but it took significant time and investment.  

There’s so much AI excitement that CIOs need to be measured, lest costs and commitment exceed the final impact.  

“In general, there’s so much work to be done that there are often competing priorities,” according to the CIO of insurance firm Aflac, Shelia Anderson. One of the key factors she uses to determine which AI project to tackle next is time-to-value. For more on evaluating potential tech experiments, check out advice from former Credit Suisse CIO Radhika Venkatraman.   

The challenge of integrating with fintechs is one of the biggest slowdowns of digital transformation, according to bank CIOs. A startup aims to make collaboration much faster and easier.

Sandbox Banking just raised seed funding for its low-code integration platform, Glyue, which helps banks connect fintech products into their existing systems.    

Making legacy core banking systems compatible with new technology can require a tremendous amount of work, but Sandbox says it can reduce development times of common integrations by 80%.

Customers are using APIs built with Glyue to integrate chatbots, balance sheet optimization tools, or banking-as-a-service solutions, which can contribute to top-line revenue growth for them via the interchange revenue from fintech end-users, CEO Ravi Balasubramanian told Insights Distilled.  

Sandbox counts United Bank, Bank Newport, and Silicon Valley Bank – which uses the Glyue platform to move data in real-time between its commercial lending systems and its core servicing platforms – among its customers. 

Just as Stripe has made it dead-simple for apps to accept payments, Sandbox makes working with fintechs a breeze, according to Tuesday Capital investor Patrick Gallagher.  

“What Stripe did for accessibility, Sandbox is poised to do with fintech integrations,” he said. “They are the ‘Glyue’ (pun intended) required to connect the banking sector to the fintech innovations required to compete over the next decade.” 

A combination of factors has decreased the threat that banks face from fintechs: Tighter conditions have squeezed digital upstarts while incumbents have been rigorous in making their own investments. 

Big banks can sleep a little easier, according to a new report from Moody’s.  

Sluggish funding and a slower growth environment have kneecapped many startups while big banks are seeing the fruits of their digital transformation efforts start to pay off. 

“The fintech threat has faded amid reduced funding and tighter regulations, while incumbent banks have stepped up to the challenge,” the ratings agency said. After all, incumbents have “been aggressively defending against [fintech] risks, either through increasing their spending in technology or through partnerships.” 

The current climate presents refreshed opportunities for partnership instead of competition, and the report points to the possibilities of acquisitions, too, as experts predict that 2023 will likely be a big year for bank M&A.  

Remember, however, that careful due diligence and a specialized approach to retaining talent are crucial to making a purchase successful instead of a flop, according to Bain analysts.