What do robots, quantum computers, and digital avatars have to do with running Boston’s largest mutual fund company? Fidelity’s Center for Applied Technology, or FCAT for short, is trying to figure it out.
In the past, that meant experimenting with trading via pagers, creating mobile apps, and improving the company’s websites. Now, FCAT studies the frontiers of computing, the metaverse, and other concepts that sound like science fiction. And despite the crypto crash, the center is also still studying the implications of bitcoin and its underlying database technology known as blockchain.
FCAT focuses on concepts that may be five to 10 years away from practical use. A separate unit, Fidelity Labs, works on technologies aimed at Fidelity’s current business units over the next three years. (The lab has produced two spinoffs, Catchlight.ai, which aids marketing for financial advisers, and Saifr, which reviews customer communications for compliance issues.)
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When it was founded in 1999, FCAT was filled with Palm Pilots and specialized gear to track the eye movements of web surfers. On a recent visit, the center had some of the latest virtual and augmented reality headsets on hand, plus a couple of robots.
In an oval-shaped room dubbed “the egg,” Fidelity displayed some recent apps and experiments done by FCAT and Fidelity Labs. One screen showed an online game in Roblox called Pancake Empire Tower Tycoon that teaches kids about financial literacy. In another corner, a video demonstrated a digital avatar that could offer customer assistance. A few decommissioned PCs, once used to mine cryptocurrencies, also decorated the room.
Quantum computing research at FCAT started in 2019 after Google announced a breakthrough in the field. Elton Zhu, director of quantum research at FCAT, was working as a data scientist for Fidelity when he was brought in to lead the project two years ago.
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Zhu, who has a PhD in quantum physics from MIT, said Fidelity is studying how quantum computers could both help and hurt its current operations.
“Quantum computers promise to solve some problems much faster than any of our traditional computers,” he said. A quantum computer potentially could help Fidelity model complicated investment risks in real-time, but also could be used to crack the encryption protecting the firm’s confidential data and messages.
At FCAT, the emphasis is on developing apps that could run on quantum computers. “We want to make sure that the software that we write can be executed on most of the hardware that is available,” Zhu said.
For example, the firm was a beta tester of Amazon’s Braket service that offers online access to early quantum computers. The 2020 experiment involved running a program to model options pricing on different computers. Fidelity has also tested sending data securely using a quantum network between offices in Boston and Merrimack, N.H.
Zhu sees a growing cluster in the Boston area of quantum computing labs and startups, plus quantum research units for multinational companies. “We’re paying close attention to the local ecosystem and we’re very engaged in it,” he said.
Startup investors would like to see Fidelity even more involved. Venture capitalist Adrian Mendoza, a Fidelity alum himself, said he sees a greater role for the investment giant, particularly since Digital Federal Credit Union shut down its fintech accelerator program last year.
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“My hope is that with the DCU innovation center closed, that Fidelity’s innovation center can play a more outward role with the broader Boston startup ecosystem and fill in the gap,” Mendoza said.
Fidelity’s efforts come as the financial services industry is seeing significant innovation in the infrastructure used to move funds, including by the Federal Reserve, according to Sarah Biller, cofounder of the FinTech Sandbox in Boston. “Of all the innovators, though, Fidelity has an uncanny ability to see what’s next for the industry and thoughtfully build upon their comparative advantage while being a cornerstone for the Boston startup community,” Biller said.
Reliable quantum computers are still years away, but some of FCAT’s other experiments might become useful sooner.
Since the pandemic, Fidelity took out the reception desk at FCAT’s third-floor headquarters and has an LG robot dubbed “CLOi” in place to guide visitors to different areas. The robot could really come in handy once the center — along with many other Fidelity departments — moves from the current offices next to South Station over to a new HQ the company is building in the Seaport on the grounds of the old World Trade Center.
“It’s a huge space,” one FCAT executive said. “We’re going to need a lot of CLOi’s.”
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.