Sberbank of Russia is to set up a $100 million venture fund, rising to a possible $700 million over three years, to invest in promising fintech start-up companies.
Details of the fund were disclosed by Mircea Mihaescu, the bank's head of innovation, in a blog post
translating a Q&A interview with a local Russian investment magazine.
It follows the establishment six months ago of a new R&D centre and 'Technology Innovation Council' to explore the use of new technology across the banks.
Mihaescu says the R&D unit is currently working on 20 projects encompassing developments in big data, cloud computing, mobile payments and personalised online banking.
On the big data front, the bank is assembling the technology required to round up transactional data sets from different silos and store them in a central repository for data mining and analytics purposes. Sberbank is also contemplating the incorporation of customer social media activity for cross-mapping with bank-held data in order to offer highly-targetted, personalised financial advisory services.
In the cloud, the bank is creating a private cloud environment with the aim of moving non-core applications away from the mainframe and into the ether.
Sberbank is also exploring the use of artificial intelligence and natural language processing for answering customer queries on its Website. To this end, the bank is engaging with IBM on the modifications and fine-tuning required to apply Big Blue's Watson supercomputer in a banking environment.
Describing mobile payments as a "priority" area of investment, Sberbank is currently piloting the use of both stickers and microSD cards for transforming mobile handsets into NFC-enabled payment devices.
The establishment of a special-purpose innovation fund marks an attempt by the bank to get in on the ground floor with a wave of promising start-ups using Internet-based technologies to re-invent banking. It is already working with US-based card tech firm Dynamics to test an initial order of 300-500 of the firm's programmable mag-stripe cards.
The new fund will be looking to invest in similar companies that have come through the angel stage of investment and have a working product that can be put into production at a bank.
"If we find them useful for us - we first do a pilot," says Mihaescu. "So we do the due diligence. If it works out - we are going to make the company one of our suppliers. We are going to give them a huge reference account. We are going to give them validation."
He says the bank has already identified approximately 50 firms around the globe that it is interested in working with. He says that the initial $100 million round will be solely funded by Sberbank in concert with Troika-Dialog as a "general partner".
"Second and third fund will increase the overall volume of venture funds to $700 million total," says MIhaescu. "For the fund where we are the main investor we will be mainly looking for large international banks to become limited partners with a smaller investment level."