Innovative effort at Fidelity Investments results in Harvard students presenting new business ideas

Fidelity Investments today hosted four teams of Harvard students who demonstrated new products that Fidelity can bring to market, the culmination of a program the investment giant put together to collect innovative ideas from new sources.

The program was conceived of by Fidelity last September and designed with the help of the Harvard Innovation Lab and IDEO, a design and innovation consulting company, says Sean Belka, Senior Vice President and Director of the Fidelity Center for Applied Technology, what insiders simply call Fidelity Labs (see our Q&A with Belka).

Harvard I-Lab provided the venue and mentors for the experiment, and IDEO senior design lead David Goligorsky developed the curriculum and guided the students in use of IDEO's Design Thinking methodologies. Fidelity itself committed many internal experts to mentor the students, identify pertinent company data, and connect the students to appropriate internal business contacts.

The initial call for participation went out to the full Harvard student body, Goligorsky says, seeking people that enjoyed developing new ideas or envisioned starting their own company one day. That effort netted 160 takers, more than anyone was expecting.

This group, which included people from the graduate and undergraduate schools across multiple disciplines, was brought in for a Saturday/Sunday workshop to develop design briefs to see what ideas would percolate up and see how teams gelled.

From that original group 16 students were selected to participate on four teams examining business opportunities for Fidelity in four specific areas: artificial intelligence, data visualization, wearables and social media. Each team had nine weeks to put together their final presentation for demo day, which was held today (Aug. 8th) in Fidelity Labs in Boston.

Belka says one big challenge was how to guide the students, given the Labs already has ongoing programs in all four disciplines. "We didn't want to be so specific that we inhibited innovation, but making it too broad would reduce the usefulness of the results, so we had to walk a fine line." Of the four groups, the data visualization one probably got the most direction, he says.

The actual presentations were very well thought out and expertly presented using compelling visuals and life-like prototypes. While we can't do any of them justice with words alone (see https://www.youtube.com/watch?v=n649SkWauiQ to get a sense of the students involved) , here are brief summaries of the ideas:

* AI. Many internal Fidelity groups use AI today, so the challenge for the AI team was intentionally broad, Belka says: How to leverage AI for competitive advantage.

This group of millennials decided to target their peers, adults 18-35 years old that have some savings and some investment goals (such as saving for a wedding or a house), but view investing as complicated and a time sink. The target market, their research concluded, was about 15 million people strong.

To lure these new investors, the AI team concluded they had to offer a tool with an intuitive interface that could personalize investment advice based on the users' goals, and automate portfolio construction.

The prototype application demonstrated featured drag and drop and other common touchpad controls to set goals, after which Fidelity Robo Advising, as they called it, would select target markets for the newbie investors.

While the Fidelity "mothership," as the AI team referred to it, could develop this tool in-house, they advised using an incubation approach featuring a lean team of 5-6 people because they would be able to move faster and take more risks.

* Social.   The social media team also targeted Generation Y millennials, principally because they are the heaviest users of social media. Millenials represent one quarter of the U.S. population today, their research showed, and they spend three to eight hours on social media per day.

What better way to get this target group excited about investing than to lower the barriers to investing and cater to their social leanings, they say.

The Pocket Change app they conceived would let users build portfolios of stocks in companies they are interested in, share those lists with friends, and make fractional investments a bit at a time, making it more fun than overly risky. It would also have built in tracking tools to show how investments are doing, and potentially even let you create fictional portfolios to whet the appetite.

Built-in learning modules would enable users to learn more about investing at their own pace, with the idea that as investors got more serious, they would be perfect candidates for Fidelity's huge portfolio of traditional investing tools.

The team said they could build a full working prototype in three months.

* Wearables. The wearables team was told to specifically address workplace investing, and ended up focusing on health savings accounts (HSA),  which Wikipedia describes as "a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan."

The myHSA app the team came up with is designed to help users leverage the core advantages of HSA programs -- contributions are tax free, the savings grow tax free, and withdraws are also tax free -- by removing the complexity of participation.

The app demonstrated simplifies record keeping, tracks your balance, lets you pay bills, makes it easy to invest and, the wearable component, can be connected to wearable devices that track exercise for plans that offer rewards for participants that stay in shape.

The wearable team wanted $200,000 to take the idea to the next step.

* Data visualization. The final team was also asked to focus on workplace investing, in particular on new ways to enable Fidelity relationship managers to show clients how their employees are benefiting from Fidelity programs.

The team quickly realized that the tool not only had to wow the client, but also had to help simplify the way Fidelity employees collect and present reams of relevant data.   As such, the data visualization team strived to deliver a tool with "stunning visuals" and interactive features that would enable relationship managers to engage clients in a discussion about desired outcomes and how to possibly achieve them.

The result is Looking Glass, a modeling tool that is fully customizable and, on the fly, can let Fidelity representatives work with clients on various "what-if" scenarios.

The team showed a prototype and suggested that, with an investment of $196,000, they could deliver a working model in six months.

After the presentations the teams manned booths and Fidelity employees were able to get hands-on demonstrations and talk in more depth with the respective team members.

Belka says the next step is to filter these final ideas through the firm's standard incubation process to see which, if any, of the ideas to act on.

Asked if the program was a success, Belka said it exceeded everyone's expectations and they will likely pursue similar efforts in the future.