TECH NOTES - Innovations for investors

Fidelity Investments likes to stay ahead of the game.

Fidelity Investments likes to stay ahead of the game. The Web is by far the mutual fund giant’s most popular sales channel -- fully 90 percent of its customer contacts come through its various sites. But a demographic storm is approaching the Boston-based firm in the form of millions of retiring baby boomers. As that huge cohort ages, the way it uses Fidelity’s primary contact channel will begin to change with it.

That’s why, back in December, the firm celebrated the grand reopening of its emerging-technology lab, the Fidelity Center for Applied Technology,which boasts new demonstration facilities, usability labs and the look and feel of a set from a sci-fi thriller. The lab is already testing new Web features with older users, as well as with the visually impaired.

Few asset managers have the resources to devote so much effort to testing Web applications with customers and explore emerging technologies that may sit on the shelf for as long as five years before being deployed. But with a $2.4 billion technology budget, Fidelity can certainly afford to stay on the cutting edge. Still, Steven Elterich, Fidelity’s chief information officer since 2004, prefers to emphasize FCAT’s practical side: “This is a working lab where ideas coalesce from across the company. This is the best of our new thinking. We develop technology pilots here, where they can be assessed to determine whether they can be introduced to customers.”

Elterich, a 20-year Fidelity veteran, built the technology that now supports some of the firm’s biggest businesses, including defined contribution recordkeeping and benefits outsourcing services. In 1999, Fidelity chairman Edward “Ned” Johnson asked him to assume responsibility for e-business across the firm, an effort that has informed his work in emerging technology. With the Internet, much of the firm’s technology, he says, “is sitting in people’s living rooms and offices. If we have any issues with technology, it becomes a huge problem.”

Thomas Tullis, senior vice president of human interface design at FCAT, who started his career at AT&T’s Bell Laboratories, says his team has put a number of usability initiatives in place, including “click-to-call,” the voice over Internet protocol feature that marries telephone and Internet capabilities. With click-to-call, investors can immediately connect to a call center representative to help with Web tools and other features that may confuse new users. “The intent is to bring a branch center to your home,” notes Elterich. Call center representatives can push pages to users, view how they enter information and help out in real time with planning tools.

The usability labs have been designed to test prototypes of Web applications and for developers to observe and record user’s experiences. “When you’ve been deeply involved in developing a new part of, it gets hard to see it through fresh eyes,” Tullis says. “I’ve been doing this for years, but I’m constantly surprised by the results. What you think will be simple turns out to be confusing, and vice versa.” FCAT uses infrared light to track where users are looking on a computer screen. “It’s fascinating. You watch this blue dot flying on the screen,” Tullis says. But it’s not just a novelty. Fidelity is using the infrared tests to optimize the look of its Web sites to ensure that users get the most out of the sites’ capabilities.

Another study focuses on the elderly and whether they use the Web differently than do younger users. Older users, for example, often hesitate before clicking on links that might take them away from their current page.

“There is a great degree of caution in older users’ interactions with the Web,” says Tullis. “They’ll debate with themselves whether to click.”

But by simply adding action words to links, such as “go to accounts,” rather than just “accounts,” Fidelity has found that users feel much more confident navigating the site. FCAT is also designing tools for users who are visually impaired, another demographic group that the firm expects to make up an increasing percentage of its customers over the next few decades.

It’s essential to constantly develop new capabilities in the financial services industry. “Technology development,” says Elterich, “is nothing short of an arms race.”