Fidelity Labs: A Far-Reaching Innovation Strategy to Transform the Customer Experience through Experiments, Pilots and Internal Incubators
Interview with Sean Belka, Senior Vice President and Director, Fidelity Labs
Financial technology, or FinTech, is one of the hottest areas within IT, and Fidelity Labs is poised to be a leader in nurturing new businesses, sharing innovation across the firm and testing new products for this fast-growing market.
Fidelity Labs, the innovation arm of Fidelity Investments, has a mandate to find new and better ways to help people achieve better investment outcomes. FinTech is a big part of that, including emerging areas Fidelity Labs is focused on such as predictive analytics, blockchain and digital currency, financial wellness, student loans and the gig economy.
The organization emphasizes rapid experimentation, Design Thinking and a Lean Startup approach, with its internal researchers and strategists relying on co-customer development to explore emerging technologies and incubate new products, services and businesses designed to address the biggest challenges its customers face.
Scan, Try, Scale: Three Key Tenets
FinTech presents especially exciting opportunities for Boston-area organizations, says Sean Belka, senior vice president at Fidelity Investments. Fidelity Labs has an array of experiments, pilots, and incubators, with its objectives falling under three key tenets: Scan, Try, and Scale.
Within the Scan tenet, the lab works on monitoring technology trends, researching ecosystems, producing an annual research priorities report, operating research-themed clubs, and developing and offering a speaker series.
The Try tenet includes a Design Thinking methodology, Spigit Idea Generator, prototyping and testing, hackathons, proof of concepts, and business incubators.
And the Scale tenet encompasses innovation workshops to encourage innovation throughout Fidelity, through the internal incubators, business unit partnerships, and the Fidelity Patent Program.
Internal Incubators and Topic-focused Clubs Drive Change, Engage Talent Across Fidelity
Internal incubators are a key focal point for Fidelity Labs. It currently has 11, covering areas such as artificial intelligence, blockchains, student loans, and the gig economy.
“The incubators develop products internally and test them with customers,” Belka says. “Co-development with customers is key. This is an iterative process, so all tools best serve customers and the broader organization.”
As part of the incubator efforts, Fidelity Labs puts together an internal team of subject matter experts, designers, developers and entrepreneurs. Through Design Thinking and iterative product development, the team pilots tools designed to solve problems and build resources for customers.
Several pilot programs have included academic partnerships, including the Harvard I-Lab and MIT Media Lab locally. These projects can focus on specific emerging technologies, such as blockchain and user interface research and experimentation. They have also led to student and community projects, such as hackathons, design thinking challenges and human-centered design sessions.
“Fidelity values partnering in Boston with the best and brightest,” including collaborative organizations like the FinTech Sandbox, MassChallenge and TedXBoston, Belka says. “For nearly 20 years, Fidelity Lab’s mandate has been to find new and greater ways to help people achieve better investment outcomes. We aim to maintain leadership in the market and an entrepreneurial spirit.”
Internal topic-focused clubs are another focal point. Fidelity values giving its employees the chance to connect, learn, and innovate based on interests. Internal clubs at Fidelity Labs span all research areas. “This is another way to retain talent and gives new groups the chance to think about hard problems,” Belka says.
Success Metrics: Transform the Customer Experience, Impact Across the Organization
Fidelity defines success as “investing in technology changes that transform customer experience, Fidelity’s business, and the world around us,” Belka says. The organization to date has 200-plus patents worldwide, and has a history of being innovative. Key milestones:
- First investment company to install mainframe computers (1965)
- First mutual fund company to launch a Web site (1995)
- First mutual fund company to launch a mobile app (1998)
- One of the first investing apps for iPhone (2010)
- First investing app for wearable devices, including Google Glass and SmartWatch (2013)
- First widely available investment app for Oculus Rift (2014)
- Enabled investors to donate bitcoin to charity (2015)
Fidelity Labs continues to have a significant impact on the overall corporate entity, Belka says. “We have always embraced technology as a way to scale and deliver outstanding financial products and experiences.”
The corporation has some 10,000 technologists around the globe, and one quarter of its workforce is involved in technology in some way. Fidelity spends $2.5 billion annually on technology, including R&D.
”The goal of successful R&D from Fidelity Labs is that the developments are adopted by all of Fidelity Investments as problem-solving or cutting-edge innovations,” noted Belka.
Opportunities for Collaboration: Cyber Security, AI, Blockchain….Wealth-Health Linked Data Agendas
Cyber security, artificial intelligence, and blockchain are three areas of industry-wide challenges where Fidelity sees opportunities for collaboration aimed at generating additional startup activity and academic partnerships.
There is also significant interest in developing research and data on the connections between wealth and health, given the parallel impact of both for productive lives and retirement.
Talent the Defining Resource – and Boston’s Competitive Advantage
With FinTech as a focal point, people and talent remain the important priority and the competitive advantage Boston offers. Bringing together the best minds in the region—from the startup, investment and academic communities—to share insights and ideas and develop solutions for financial technology innovation will be a constant goal for the organization.
“We take a human-centered approach and a culture of experimenting and prototyping to create the best products and services based on customer need,” Belka says.
Banner Image: The Fidelity Patent Program provides support for employee inventors to pursue their ideas. Fidelity Labs helps run the program and holds PatentFest events at different employee locations that feature outside speakers, panel discussions and presentations from other inventors. (Photo: a 2016 PatentFest event at Fidelity)