On the horizon: applying 3H methodology at ATB

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Horizon-three may sound like the next SpaceX rocket, but it’s not quite that exciting (especially if you’re into space travel). In the innovation space, we talk about 3H methodology as a marker of market assuredness and risk related to technological change. In general, technologies further out on the horizon have riskier adoption prospects, higher technological challenges, and are riskier capital investments. 

As a consumer, it can be exciting to get the first release of a product or software, but it often comes at the risk of it not functioning perfectly, or a better model coming out shortly after. As a first-mover, you’re taking on higher risk, with the hopes that the rewards will be greater.

As an innovation focussed organization, we also have to be strategic about investing our time and resources in technologies that will have a real impact on our customers and our bottom line. That means balancing the mix of horizon-one, two, and three technologies that we invest in. 

So what’s on the horizon in banking?

Horizon-one is an immediate market need. There is high market assurance that this technology or product is something that customers want. This is typically where the majority of capital goes. As market assurance goes up, so does overall capital. While investments in horizon-one technology are fairly safe in terms of demand, they are also highly competitive, as there is widespread market adoption. 

Machine learning today is a horizon-one technology. There are out-of-the-box solutions and there is high assuredness of demand for machine learning technology. However, applications of machine learning can take us into horizon-two or three. For example, at ATB we’re exploring machine learning applied to natural language processing and robotics processing automation with Pepper, our customer service robot.

Horizon-two is a bit further out on the technology curve, with about 60 per cent market assuredness. So you’re pretty sure that it’s coming and there is a market need, but there might be some technological barriers. 

An example of horizon two technology is voice interaction applied to home voice assistants. There has been significant uptake in the adoption of the hardware by first movers and the early majority but there are still some barriers to integration, kinks in the technology, and less than sure majority acceptance as we move down the technology adoption curve.

Horizon three technologies are about the five-year out mark. There are likely high technological barriers and low assurance that the market will adopt the technology. 

Imagine something that seems almost sci-fi now that could be part of everyday life in the not so distant future (think a few years back to what you thought of artificial intelligence or self driving cars). Looking forward, we could see implants taking over as the next phase of wearable tech and quantum computing revolutionizing encryption and the power of data analysis through machine learning. 

Finding the balance between investment across the three horizon technologies is crucial for any business that wants to keep up with the pace of technological change. As traditional banks compete with fintechs and with companies like Amazon and Apple making forays into finance and banking, it is more important than ever for us to be exploring all three horizons. When the next technological rocket explodes, we’ll be at the helm, steering it to uncharted territories.