Fidelity Center for Applied Technology FCAT “Customer Focused Innovation: Leveraging Emerging Technologies to Create Customer Value”

Company Overview  Fidelity Investments is one of the world's largest providers of financial services –assets under administration of nearly $3.2 trillion –managed assets of nearly $1.5 trillion as of November 30, 2009  The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket, a leading online brokerage firm and one of the largest providers of custody and clearing services to financial professionals.  Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to over 20 million individuals and institutions as well as through 5,000 financial intermediary firms.

Why Innovation? Sources: Creative Destruction, Foster & Kaplan, 2001; “Extreme Competition, McKinsey, 2005 Average lifetime of S&P 500 Companies has decreased from ~60 years to ~15 years Likelihood of a market leader falling from the top has increased 2-3X since the 70s

How Do We Define Innovation? “Process of creating and delivering new customer value” Impact # of Ideas Innovation Distribution Radical, disruptive innovation Game-changers Incremental improvements Kaizen Ghiglino, 2007

FCAT is focused on innovation to deliver business results “Fidelity’s idea and innovation catalyst; helping Fidelity’s businesses and clients to imagine the possibilities and realize the benefits of new ideas and emerging technologies.” FCAT: Executive Briefing Center Library & Seminars Research Development & Transition Innovation Process Mgmt

FCAT Centers and Capabilities Fidelity Center for Accelerated Innovation Identifies and implements management techniques to improve the process of innovation: collecting more high-quality ideas, implementing them more rapidly and achieving greater business impact Fidelity Center for Applied Behavioral Economics Fidelity Center for Collaboration Fidelity Center for Complexity Applies behavioral economics to help investors make good financial decisions and achieve their financial goals Develops frameworks, tools and methodologies for analyzing and governing complex adaptive systems, including large organizations, large technology infrastructure and financial markets Researches, innovates and applies advanced collaboration models, techniques and technologies that deliver market place advantage to Fidelity and our customers Fidelity Center for Energy & Environment Acceleration Patterns Disrupt Innovate Strategic Service/Process Researches and pilots environmental technologies and management practices to improve resource efficiency, increase competitiveness and customer value Efficiency Employee Engagement Products Brand Client Engagement Emerging Technology Identifies emerging technology trends, develops proof-of-concepts and pilots and then transitions to appropriate business partner Emerging Consumer Trends Identifies digital consumer behaviors and motivations to drive technology utility and adoption

THE GOALS The Center for Accelerated Innovation supports Fidelity’s innovation efforts  Generate more ideas  Fund the best ones  Achieve a higher “success” rate (by learning faster)  Work more efficiently  Implement more quickly  Increase business impact 6/25/2015Fidelity Internal Information7 The Innovation Funnel start wide PRODUCE MORE VALUE narrow rapidly through experimentation and prioritization progress quickly and efficiently start wide

THE SCOPE Using management tools and techniques to improve the innovation process 6/25/2015Fidelity Internal Information8 Front End  Sources of innovation  Adoption of external innovation  Idea management Back End  Success criteria  Hand-offs In Between  Measurement  Resource allocation  Governance  Activities and deliverables

THE APPROACH Identifying the right tool for the job Philosophy  Theories on innovation abound, but no single tool, process, or technique works in all situations  Some practices outperform consistently, others outperform in certain situations  Identify the right practices for the situations Fidelity faces Activities  Ongoing research and conversations  Track developments in the field  Summarize implications for Fidelity  Engage in a conversation with Fidelity stakeholders  Business engagements on specific topics  Consulting and pilot projects Examples  Idea Management software  Open Innovation best practices 6/25/2015Fidelity Internal Information9  Creativity techniques  Innovation metrics Idea / ConceptResearchPOCPilotScale / Rollout

Emerging Technologies FCAT explores a range of emerging technologies…

Emerging Technologies …with a focus on years until mainstream adoption

FCAT “Idea Ecosystem” ACADEMICS Stanford D School Santa Fe Institute LEADING COMPANIES INTERESTING SMALL COMPANIES Google World Innovation Forum FCAT Steering Committee FCAT Interest Groups EMPLOYEES Library Requests Lecture Series Carnegie Mellon MIT CSR Babson CIMS CUSTOMERS TCF Fidelity Labs Value Network Mint COMPETITIVE ANALYSIS CONSULTANTS Forrester Gartner IDEO Seybold Group Burton Group CONFERENCES TED GEL PopTech Adobe CISCO HP Microsoft Cake techSearch Queries Conference Board BU CIOs multi-year plans Corporate Insight Northeastern, Center for Complex Network Research facebook IBM Amazon Toyota Wikipedia Netflix Twitter THINK TANKS TTI/Vanguard Institute for the Future Corporate Executive Board TRADE ASSOCIATIONS MITX EBRI ICI SEC U.S. Congress GOVERNMENT State Governments Presidential Administration FINRA VC’s Volition Capital Intel Capital Google Ventures

FCAT Strategy Map articulates how we plan to deliver business results Client Better Investing Results Greater Capabilities Improved Competitiveness InvestorsFidelity EnterpriseB2B Clients Identify New Ideas & Technologies Create Actionable Concepts Develop/ Implement Pilots Deliver & Scale Emerging Tech Research Concept Playbook Deployment Proof of Concept Process Fidelity Labs Next Generation Development Innovation Process Management Process and Operations Skills, Knowledge & Culture Analysis Behavioral Economics Data Visualization Collaboration Complexity Theory Syndication Conceptual Prototyping Process Idea Management Graduation/ Transition Process Management Technology Consumer Forum Advanced Multimedia Improved Experience & Satisfaction Design Energy & Environmen t Improved Efficiency Improved Agility & Scalability Connect & Communicate Global Seminar Series Executive Briefing Process Special Interest Group Leadership Research External Partnership Management Thought Leadership Relationship Management Technology Operations/ Production Sales/Relationship Mgmt Support Benchmarking Development Skills Innovation Curious Experimental Innovative Agile Pragmatic Client-focused Externally oriented CultureKnowledge Data Mining Infrastructure Efficacy

Customer value is found at the intersection of client needs, enterprise objectives and emerging technologies “Fidelity’s idea and innovation catalyst; helping Fidelity’s businesses and clients to imagine the possibilities and realize the benefits of new ideas and emerging technologies.” FCAT Mission: FCAT Focus Areas Enterprise Objectives Client Trends Emerging Technologies FCAT 2010 Plan Client Trends Mobility Social Cautiousness Desire for more information Choice Guidance FCAT Focus Areas Behavioral Economics Complexity Collaboration Enterprise Objectives Customer success Growth Efficiency Brand Competitiveness Innovation Emerging Technologies Collaboration Emerging Devices Natural User Interfaces Social Media Mobile Energy & Environment Innovation Emerging Technology

Social

Mobile

Collaboration

Natural User Interfaces Touch Voice Gesture

“None of us is as smart as all of us.” - Ken Blanchard It’s about… Ideas Inventiveness “The best way to predict the future is to invent it.” - Alan Kay “Innovation distinguishes between a leader and a follower.” - Steve Jobs Innovation “The future is here; it’s just not widely distributed.” - William Gibson Scaling Collaboration “Advice is judged by results, not by intentions.” - Cicero Results “All the forces in the world are not so powerful as an idea whose time has come.” - Victor Hugo