Becoming Digitally Mature: Fidelity Investments

In Week 2 of ISYS6621 we explored the ‘Digital Transformation of the Enterprise’. We learned that digital transformation is not just how companies choose to use technology, but instead it is a continuous adaptation to how technology is changing the way business is done. One of our readings, SMR’s Research Report “Achieving Digital Maturity”, outlined five key practices of companies that are becoming digitally mature. In this post, I explore these key practices as they apply to Fidelity Investments to support my belief that Fidelity is a digitally mature company. I am particularly interested in Fidelity because I interned in their Financial Leadership Program this past summer and will be joining full-time upon graduating this Spring.

Fidelity Investments is a privately-owned, Boston-based investment manager that provides financial services to individual investors, employers, institutions and financial advisors. Fidelity offers 401K and IRA services, brokerage accounts, estate planning, wealth management, and much more. Fidelity currently has about $2.4B of assets under management and $6.7B in assets under administration.

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Now, on to how Fidelity stacks up against the key practices of digitally mature companies…

1. Implementing systemic changes in how they organize and develop workforces, spur workplace innovation, and cultivate digitally minded cultures and experiences.

One of the many ways in which Fidelity promotes workplace innovation is through its Fidelity Clubs, which currently include The Behavioral Economics Club, Bits and Blocks Club, Big Data / Artificial Intelligence Club, The Future of Work, Inventors Club, and Cloud Club. From the titles you can tell most of these clubs are centered around digital technologies. All 50,000-ish employees from around the world are encouraged to participate…bringing together people from different roles, functions, offices, and countries to share ideas and learn from each other. Community boards, meetings, seminars, outside speakers, and more are used to discuss new technologies, and come up with ideas on how they can solve customer or workplace needs. This is Fidelity’s version of the English coffeehouses we heard about in the Ted Talk “Where Good Ideas Come From”…an open network to connect hunches and bring about new ideas.

2. Playing the long game.

As @markdimeglio points out in his blog on his favorite buzzword, it seems every company in the world is touting how innovative it is. However, innovation is nothing new to Fidelity and not just a buzzword. Fidelity’s heritage is, and always has been, to “take intelligent risk and don’t follow the crowd”, which has allowed the firm to be on the forefront of technology in financial services. From the first to sell mutual funds over the phone in 1974, to the first mutual fund company with a website in 1995, first mobile application in 2010, and first smartwatch application in 2014. All of these firsts were in response to how technology was changing the way Fidelity’s customers were doing business. As technology continues to advance, Fidelity will continue to adapt to provide innovative solutions to its customers. Which leads to…

3. Scaling small digital experiments into enterprise-wide initiatives that have business impact.

Fidelity Labs is the innovation group within Fidelity Investments that was formed in 1998 and currently consists of a team of about 150 researchers, designers, and technologists. The purpose of Fidelity Labs is to investigate, research, and experiment with new ideas and technologies in attempt to find solutions to real customer needs. Solutions are prototyped, tested, and, if feasible, scaled and handed off to the responsible business unit. Having an experienced team dedicated to innovation allows Fidelity to quickly and efficiently test and scale new initiatives.

A sample of today’s initiatives include the usual suspects of technology buzzwords: blockchain, artificial intelligence, big data, emerging interfaces, fintech, future of work, and more. Fidelity Labs is trying to answer questions such as: How will augmented and virtual reality change how financial advisors interact with their customers? How will blockchain transform financial services, transactions, and trading platforms? How can Big Data be used to better understand the needs of customers? And much more.

4. Becoming talent magnets.

Fidelity prides itself of its career development programs, which encourage employees to explore new skills based on individual interests. In addition to the tech-driven clubs mentioned above, Fidelity has an online training platform with hundreds of classes and seminars on a full range of topics, including digital and technology topics, that are available to all employees. These programs allow employees to continue to grow and develop new skills in order to help the company stay adaptable in an ever-changing environment.

5. Securing leaders with the vision necessary to lead a digital strategy, and a willingness to commit resources to achieve this vision.

Fidelity is currently run by its founder’s granddaughter, Abby Johnson. Abby Johnson has embraced technology throughout her career and, for example, has most recently become a vocal proponent for the exploration of bitcoin and blockchain technologies in financial services. At a time when JPMorgan Chase’s CEO Jamie Dimon was calling bitcoin a fraud (he has since backpedaled on his statements and JPMorgan recently released a 71-page report on cryptocurrencies), Abby Johnson was giving a talk at Consensus 2017 challenging folks to improve the technology and make it easier to use because she understands this new technology will change financial transactions and markets.

Abby Johnson does not just talk the talk – she has committed Fidelity resources to venture investments, research efforts through the Fidelity Labs blockchain group, and academic partnerships. This is just one example of the vision Fidelity’s senior leadership has for embracing digital transformation.

Key Takeaway

In this post I wanted to introduce you to Fidelity Investments to give you a small taste of some of the cool things “non-tech” companies are doing with technology, social media, and digital business. Most of you are undergraduates that are going through the internship or full-time job recruiting process. While the Googles, Apples, and Amazons of the world get most of the headlines, there are plenty of other companies out there that are adapting to technology in cutting-edge ways…even in “unsexy” industries such as financial services.

4 comments

  1. Hey really like this blog post! I interned with liberty mutual over the summer which works with financial services and insurance which is definitely as you mentioned an “unsexy” industry. They have also been making moves to be more “innovative” which is definitely something that falls under the radar when people look at companies to work at. I think college students have a perception of financial services and insurance industries as old giants that aren’t very technologically advanced. Lindsay even touched on this when she was talking about John Hancock! The idea of wanting a large company that has a startup like quality to the workplace is really hard for larger well-established companies to do. It is cool to see the progress that companies like fidelity are making to become advanced in technology. Do you think this will work in convincing new college talent to come work for them?

  2. Really interesting to hear your perspective, Matt. I particularly like your mention of “Fidelity Clubs,” something I feel a lot of companies are doing to increase moral and employee engagement. A company that I’ve interned with in the past really prided themselves on these groups as well. However, the majority of interaction between the people in these groups took place on an online platform very similar to Facebook. At this point, to me, it felt like more of a chore to go in and check on any new updates. I didn’t feel the “social” and collaborative aspect of it. I think the fact that Fidelity incorporates such a wide range of activities — some centered around technology, others not — is helpful in getting people involved.

  3. Fun fact: if you skip to 18:01 in the video of Abby Johnson’s talk, you can see an amateur caricature of the person I sat next to this summer at Fidelity. Alex is a huge proponent of Bitcoin and taught me a lot about the technology over the summer. He recently was named the Director of Blockchain Research at Fidelity, which shows me that the company is putting its money where its mouth is in terms of its interest in the subject. The brief glimpse that I got at Fidelity this summer showed me that the company is truly trying to build its competitive advantage through its technological advancements and become a digital company. The types of projects that I saw during my tour of “Fidelity Labs” were not what I would normally expect from a financial services company. Fidelity’s focus has been and always will be the customer’s experience, and I think that they are continuously making strides in today’s digital landscape to stay ahead of the curve.

  4. Nice post! Maybe I need to find someone from Fidelity to interview for the research next year. Always like to find companies that are actually doing things.

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