This article was originally published in Futures & Options World.
In 2010, Eric Schmidt, then CEO of Google (Alphabet), noted "We create as much information in two days now as we did from the dawn of man through 2003." And that was in 2010! We are inundated with data all around us and the Futures and Options industry is no different. Every day we read about a volatile macroeconomic marketplace, evolving regulations, innovative technologies, and new product offerings. CME Group processed more data in 2014 than in 2004-2008 combined.
CME Group processed more data in 2014 than in 2004-2008 combined.Examples of overload are all around us. How many of us have become numb to the latest and greatest technology that we have become contrarians? Big data, Blockchain, and machine learning all went from emerging technology to Sunday dinner topics. We need an innovation process to drown out the noise and refocus on the signal. For us at CME Group, our signal is our customers and one of our key innovation processes is design thinking.
For many people, the origins of design thinking trace back to Herbert A. Simon's book The Sciences of the Artificial that was first published in 1969. For me, design thinking started with IDEO and an amazing Nightline piece in 1999 that featured IDEO’s innovation process to redesign a shopping cart. IDEO’s design thinking process was able to redesign even the most trivial of items like a shopping cart, using pragmatic concepts of customer focus, rapid prototyping, and customer led iterations. Design thinking is a critical tool that can be leveraged to provide insights through customer empathy, idea generation based on opportunity identification, and fail fast prototyping.
We at CME Group are employing similar concepts to design thinking and user centric design to transform our services and products into solutions. We have built an Innovation Lab to help implement the principles of design thinking and enhance our capabilities, especially around generating and iterating ideas. We also have created CME Labs to prototype and experiment with new technology in support of the Innovation Lab. Whether it’s a user interface design, the introduction of technology enabled solutions, or even the development of enhanced risk management capabilities, we are using the journey of our customers as our guide.
With the globalization of the internet and new sources of digitization available daily (who knew Uber in 2013?), the digital experience has become synonymous with the user experience. Customers are no longer solely focused on customer service but want a broader experience that aligns to their needs. Why wait and hope an open cab will drive by when you can use your phone to ping a car and track its progress?
Since February 2009, mobile usage of CMEGroup.com has grown from 0% to 40% today and is projected to surpass 50% by the end of 2016. Mobile is a global theme and one that requires design thinking to optimize the customer experience. For our design team, it starts with understanding the persona, and then incorporating the persona’s region and preferred device as part of the design.
In the financial industry, we envision a world of interconnectedness where the customer experience transcends device. As Steve Jobs once said, products and services must start first with the customer experience, not the technology. CME Group is leveraging design thinking to first think about the customer and its use cases before applying technologies like HTML5 responsive design, data science, cloud, and even Blockchain. We recently completed the migration of all web-based services to the CME Customer Center portal which provides single design on and are redesigning our processes to introduce customer centric process self-service capabilities through the Request Center. We are living in the age of the customer, and the financial industry is no different.
Every year there’s a new "it" technology that captures the heart of our industry but often fails to capture our mind and deliver the promised business value. In our industry, value is not in technology itself but in the application of the technology to provide business and customer value. Innovation can no longer be viewed as incremental or just a technology refresh but has to deliver new and tangible customer value. CME Group has shifted to an outside in view of technology that leverages design thinking with a customer lens that as Simon Sinek explained in Start with Why, begins with asking why there’s enhanced customer value. Why is this better for the marketplace?
As an example, rather than leveraging programmable hardware (FPGA) technology to reduce trading latency, design thinking and customer collaboration led us to focus on trading predictability and consistency and advanced risk analytics. Another example is how we have applied design thinking to frame our thinking of Blockchain and distributed ledger technology. CME Group has been collaborating with customers, partners, and startups focused on the technology to identify and deliver solutions for the highest value use cases. Our approach is not just to solve our customers’ and partners’ problems but rather to deliver solutions that enable the ecosystem to solve their problems.
The importance of securing technology infrastructure has never been more important and harder than it is today. With the accelerating pace of innovation, technology that is secure one day can suddenly become susceptible the next. We have unfortunately had to experience all too many "zero day" vulnerabilities like Heart bleed and FREAK let alone the many high profile challenges of compromised public firms. It seems each week brings unfortunate new reports of security incidents like the Starbucks payment app vulnerability, email phishing at the FIA, and even the compromise of U.S. Government systems.
Technology security has to be more than just two‐factor authentication with strong passwords and become an enabler for innovation. With the focus on customers, user‐driven content, and the interconnectedness of the broader financial ecosystem, confidence and trust is a necessity to enable and expand the rate of innovation. That can only be achieved by applying design thinking to security starting with the customer journey before identifying vulnerabilities and assessing threats.
The application of technology is vital to the future of our industry and has never been more important as we go through this transformational period. The need for capital efficient risk management has never been more critical. We see significant opportunity to continue and accelerate innovation by enabling our customers, partners, and the broader ecosystems to grow and solve their problems. Design thinking and customer focus are some of the tools we are leveraging.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the authors and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
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