Fund company Fidelity Investments is investing $2.5 billion dollars in cutting-edge technologies like blockchain, AI and machine learning. The 72-year old firm proves it is never too late to teach an old dog new tricks.
The Boston-based, Fidelity wants to stop competing with Wall Street companies like Charles Schwab and start competing with firms like Nvidia that are primarily tech-driven. CEO Abigail Johnson is following in her renegade grandfather Edward C. Johnson’s footsteps, with her new outlook on investing in the future rather than following the crowd.
Johnson has recently revealed that her company is working on not only investing in researching things like blockchain technology and virtual reality, but they will also soon have their own announcements about blockchain-related products and offerings with the estimated release date for those plans set for the end of 2018. The specifics on what exactly Fidelity has underway have yet to be revealed.
Johnson is taking a market first approach to blockchain, explaining:
“What we started with was building a long list of use cases for either Bitcoin, Ethereum, other cryptocurrencies, or potentially just raw blockchain technology. Most of them have been scrapped by now or at least put on the shelf. The things that actually survived were not the things I think necessarily we expected. We were trying to listen to the marketplace and anticipate what would make sense.”
Their strategy has proven to be more than efficient, as they ride the trends of the marketplace and continue to participate in a forward-thinking way. Fidelity ended last year with $6.8 trillion in investor assets, a notable 19 percent increase from 2016.
The firm spends $2.5 billion annually on research and development through Fidelity Center for Applied Technology (F-CAT) and Fidelity Labs. At these centers, failure is allowed. It is here where their employees can take risk away from their fund management business which lacks the “high fun” factor.
Fidelity Labs is taking a trial by fire approach to blockchain projects. Whenever there is a successful project, Fidelity tests extensively before offering machine learning apps like Cora or Pebble watch to their customer base. Fidelity continues to adopt a more cryptocurrency-friendly attitude. Employees even have their own blockchain club, “bits and blocks” that boasts over 2,600 members. Fidelity customers can enjoy checking their CoinBase crypto balances through Fidelity online banking portals.
The customer service department already uses machine learning to help predict customer outcomes and authenticate identity within seconds. These are just some of the ways Fidelity is ahead of the pack investing in, researching, and integrating the latest Web 3.0 solutions in financial services.