Fintech Innovation Labs: A Look Behind The Curtain

NICSA members received a sneak peek into the industry’s cutting-edge innovation labs during a recent breakout session at NICSA’s Strategic Leadership Forum in Miami, Florida. Chuck Gallant, Managing Director, Asset Servicing at BNY Mellon, moderated the panel, in which fintech leaders shared first-hand accounts of how their firms are exploring new products and technologies.

Gallant, who also serves as co-chair of the NICSA Technology Committee, noted that the panelists’ firms research a spectrum of technologies, including artificial intelligence, business process management, software robotics, cryptocurrency, data analytics and real-time payments. Ultimately, however, it’s the trial-and-error culture that makes these labs so unique. “Innovation is about taking risk — you can’t be afraid to fail,” Gallant said.

Timothy Butcher, Head of The Central New York Innovation Center & Global Trade Operations at BNY Mellon, painted a picture of his company’s labs. “A day in the life of an innovation center is a flurry of activity,” Butcher said. “As you walk into the innovation center you see a robotics control room with over 300 robots that are actively managing processes throughout the world on a 24/7 basis. You hear TED Talks in multiple locations and see daily huddles of individual pods of people who are working on specific smart technologies. You see monitors that literally show all of the projects, their progress, the successes and the failures.”

BNY Mellon’s innovation labs are located across the globe, including India, the UK, Singapore and the United States — from Silicon Valley to central New York. “When we walk around the world through our nine innovation centers, they all have a very specific purpose, they all have very specific methodologies that they use, and some blend into each other.”

When it comes to stocking these labs with talented people, Butcher said his center nurtures community relationships. “We have innovation labs and incubation labs on local college campuses for which we participate in business-case development with students, and have an active role in modifying that college’s curriculum as well.”

Deanna Belczak, Senior Vice President, Northern Trust, said her firm also has multiple labs with specific missions. “Ours is particularly focused on our fund accounting product and really redefining how we deliver that product solution,” she said. “At Northern, I think the importance that we place on innovation as an organization has changed dramatically over the last ten years — and that relates to the speed of change, and how critical it is.”

At the end of the day, Belczak said if you’re not able to implement those innovations and integrate them into your business effectively, you won’t be successful. “Usability of innovation is huge,” she said. “You can build something awesome, but if it sits on the shelf, it adds no business value.”

Tony Warren, Head of Strategy & Insurance at FIS — which also has innovation labs across the globe — agreed. “You have to ensure that you’re doing the right thing for the businesses you’re serving,” he said. “We have a series of steering committees and then we bring in executives from the business lines, from sales, from the technologies and from strategies, which then prioritize the efforts on what we want to do.”

Warren said FIS takes feedback from customers and industry trends into account when determining what to focus on. “We want to make sure we enhance our solutions, and therefore our services, to have a very meaningful impact on our customers’ businesses in a positive manner,” he said.

Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the NICSA event panel, they do not necessarily reflect the views of NICSA or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.

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