Wells Fargo on Wednesday announced the launch of its first accelerator program, which will provide funding and mentorship to young companies aiming to pioneer new financial services technology.
The bank will guide three startups in its inaugural class, offering them mentorship in an attempt to prepare them to one day serve as vendors. Each company receives between $50,000 and $500,000 for participating in the program, but unlike other existing accelerator programs, Wells Fargo’s program allows startups to remain non-exclusive.
Wells Fargo Vice Presidents Braden More, Bipin Sahni and Steve Ellis sat down with TechCrunch earlier this week to discuss the new program, which they said is focused more on innovation and growing the startups than a return on their investment.
“We’re not chasing returns here,” said More. “We want to see them to become vendors so we can see them help us.”
By allowing the companies to remain non-exclusive, More says they can grow more by pursuing other investors, which in the long run could pay off for Wells Fargo if it were to partner with the startups as vendors.
The Wells Fargo team explained the highly regulated banking industry can pose many obstacles for young companies, and startups are rarely equipped to handle the large enterprise needs of a bank or lack needed security measures. Through the accelerator program, Wells Fargo will help the companies develop the infrastructure they need to accommodate hurdles that might arise across the bank.
Sahni said the company had informally been running an accelerator-like program for years, looking out for smaller companies and helping them prepare for “prime time.” Now the bank is making it official so that it can give these startups exposure and guidance from across the company.
Although the bank did not take applications for the initial class, it will launch an application process for the next batch in the fall, when it plans to accept about 10 companies.
“There’s no shortage of good ideas out there,” Ellis said.
For its first accelerator round, Wells Fargo chose the following three companies from areas that could help the bank get to know its customers better: biometrics, location services and improved customer experience technology.
Simply by holding your phone’s camera in front of your face in the same position you would assume to take a quick selfie, EyeVerify can authenticate a user’s identity with the same security level as a 50-character password using the blood vessels in the eye.CEO and founder Toby Rush tells me each of the four “eye prints” formed by the blood vessels in your eye are unique, much like a fingerprint.
“We’re basically getting rid of the password,” Rush said.
For banks like Wells Fargo, he said it could be implemented both internally with employees accessing secure company information or with consumers accessing their account information.
Kasisto is a more financially savvy Siri. The spin-off venture of SRI International, the creator of the iOS personal assistant, takes virtual personal assistant to the next level by providing virtual specialists. The company is initially focusing in financial services and working to quickly perform complex transactions on mobile devices through speech, text and touch.
Kasisto CEO & co-founder Zor Gorelov tells me unlike Siri, the virtual specialist can be activated through text or selecting a common question, which is necessary in banking when a user may not be able to say sensitive financial information out loud.
“It is brandable and customizable so banks can make it their own,” Gorelov said. “More importantly its conversational so it can enable intelligent, human-like experience.”
Kasisto announced today it has received $2.25 million in seed funding including Wells Fargo. The round was led by New York Angels and also involved Two Sigma Ventures, the Partnership Fund for New York City, the Harvard Business School Alumni Angels of New York and several financial services executives and entrepreneurs.
Like EyeVerify, Zumigo’s goal is to take the password out of the authentication process, only it uses your phone. Since the mobile phone has essentially become an appendage for many of us, it can identify whether or not you’ve truly made a financial transaction based on the proximity of your phone to the source of the exchange.
Zumigo founder and CEO Chirag Bakshi said this technology could help detect fraudulent activity even before a customer reported the problem to Wells Fargo.
He also said the technology could be used for payments. By using Zumigo’s location-based verification, customers can auto-fill checkout forms just using their phones without even putting in a password if they have Zumigo enabled. The verification is multi-factored because it is based on both a user’s location and device.
Bakshi said this could cut down on costs that business lose when customers don’t make purchases because they are deterred by long checkout forms.