Jeff Carter, the Bank of America executive heading the bank's Center for Future Banking - a collaboration with the MIT Media Lab - sounds every bit the evangelist when asked about his project. To visit the center, he says, is a "life changing event. ...It literally changes the way you view life and what's going to take place. We are not looking to develop the next credit card or widget. We're looking to transform the business model. We're redefining what innovation means."
Back in March, BofA announced the deal with the Media Lab, a collaboration MIT says is unprecedented in terms of a sponsor's commitment of time and resources. BofA has agreed to a five-year partnership and committed $3 million to $5 million annually. In reality, says Carter, the bank's commitment is much higher when you consider the amount of time, money and other resources it takes to fly and accommodate executives from around the country to the Center in Cambridge, MA. Already, 500 BofA executives have participated in the program.
While the Center is not intended to design the next credit card, it is intended to answer some big questions and come up with actionable solutions. To that end, the bank has several permanent in-residence executives at the Center, people who have run $25 million to $50 million businesses, to guide the center so research yields ideas, which in turn leads to answers and finally products. So the Center is more than a think tank; it's a place to build actual prototype solutions.
The mission of the Center, to serve the 21st century consumer, becomes more vital as the BofA footprint continues to grow. With the Countrywide acquisition and that of Merrill Lynch, the bank has a relationship with two-thirds of Americans. If the institution is going to spend $1 billion on branch redesign, Carter says, it had better anticipate how customers will want to use these storefronts. As he puts it: "It's all about how we serve the customer, and to do (it) better than anyone else is capable of doing."
The first step at the Center was to bring experts from a wide variety of disciplines together to discuss the future of business. These included architects, behavioral economists, marketers, civil planners, and other experts on the intersection of the physical and virtual worlds. From those sessions the Center identified five macro trends and is presently asking questions and aligning research around each trend: information value chains; network economies; behavior economics; trust, privacy and security; and corporate social responsibility. The sorts of questions include: How do you demystify financial management? How will social networks change the way we live? How will mobility change banking? How do you get people to make better financial decisions? How do we foster financial health and live better?
Ultimately, Carter explains, the bank is attempting to "redefine the ecosystem," and ask questions whose answers will allow the bank to capture its advantage with customers. That said, certain areas, such as security and privacy, are best tackled in concert with others in the industry. "In 2009 we might even collaborate with other banks," he says.