Banks find big innovation payoff in hackathons

U.S. Bank is the latest in a long line of banks to cultivate innovation through intense coding jams, but some analysts question whether such events yield tangible value.

By Clint Boulton
Sept. 15, 2016

Vishal Srivastava pulled an all-nighter coding one weekend building a mobile application that turned the onerous and sometimes awkward task of settling a restaurant bill into a game. An amusing twist on credit card roulette, the software includes monsters that eat their way around the screen before settling on the photo of the victim who must pay the tab.

The app, Undutchly, won the $15,000 grand prize in a hackathon held last month at Plug and Play's Tech Center in Sunnyvale, Calif, hosted by U.S. Bank and MasterCard. The competition, which included 100 developers spread across 23 teams, is part of U.S. Bank's bid to uncover new software by tapping into Silicon Valley’s programming talent. "We thought, let's engage the smart folks in Silicon Valley to build solutions using APIs," Doug Nielson, U.S. Bank's senior vice president for innovation research and development, tells

Once viewed as risky for heavily regulated big banks, hackathons are becoming de rigueur for financial services firms, which due to organizational bureaucracy, a preoccupation with upgrading legacy IT systems and an inherent aversion to risk have struggled to cultivate innovation. Now banks, many of whom are desperate to attract those digital natives known as millennials, are borrowing a page from the playbooks of Facebook, Google and many other software-happy Silicon Valley giants whose developers host caffeine-fueled coding jams into the wee hours.

Hacking for the sake of small businesses

U.S. Bank’s recent hackathon, titled "Think Big Hack Small,” was targeted at small businesses, such as bakeries and restaurants, which tend to have to both manage their own finances and the daily grind of operations. "If they're a small restaurant they're probably more worried about whether the linen is going to be delivered before the lunch rush than they are about how they're bank account is doing and whether his employees are using a corporate card properly,” Nielson says.

Most small restaurants don’t have time to market themselves, which is where Undutchly could prove useful. Restaurants could use the app to better engage with customers, issuing special offers through the software to boost loyalty, according to Harvey Chan, who teamed with Srivastava, Tami Kwok, Amanda Bukur and Zach Moore to build the software. Undutchly securely stores each player’s tokenized card information and processes payments using APIs that MasterCard made available for the hackathon.

Making code and data available is key for any hackathon, which are predicated on the Silicon Valley ethos of sharing. U.S. Bank and MasterCard used a software platform from startup Akana to expose their APIs to external developers. Participants used Akana to manage and consume the APIs they elected to use in their apps.

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