The pension industry is often accused of being behind the times when it comes to communicating with scheme members, in many cases rightly so. Compared to banking and investments, a great many schemes are playing catch-up.
One large pensions firm, for example, has recently upgraded its member website for former staff, introducing a fresh look to its previously text-heavy and unengaging pages. It’s not a bad effort, but it’s also clear from the user experience that the design is skin-deep, with screen refresh times of typically 10 seconds. For a $50bn global organisation specialising in insurance and benefits administration, this does seem like a poor advert for its own capabilities.
Happily, a host of FinTechs are challenging the incumbents with a range of solutions that show it doesn’t have to be like this. Here, I look at five key technologies that are adding value to member communications and financial planning.
Video
Okay, so digitally produced video is merely the latest incarnation of a technology from the late 19th century, but there are some great examples of it being used in new ways, starting from a marketeer’s standpoint of ‘what the customer needs’.
AHC and Quietroom are leaders in this field, producing financial education videos in everyday language and using humour to get their point across. AHC has gone further and introduced gamification, with what-if tools to help pension members through their plans and choices.
Personal finance apps
The advent of Open Banking has meant FinTechs have been able to replace screen-scraping technology (where an app logs into a customer’s pension account using their username and password and reads the data from the screen) with more secure, bank-approved data transfer methods.
MoneyHub won the 2019 UK Platform Award for “Leading Digital Platform”, with its app using Open Banking and Zoopla integration to create a balance sheet of their customers’ net wealth. The app learns over time how to categorise spending and tracks this against budgets. It’s aimed primarily as a low-cost workplace perk, and users can locate an adviser and easily pass their full financial details across to them to fast-track the financial planning process.
There is competition in this market, including MoneyDashboard and Emma, with Bippit and Adzuki due to launch soon. None yet has the advisory links of MoneyHub.
Meanwhile, similar, free-to-use apps such as Smart-Bill & Youtility will monitor your bills to look for savings opportunities in household bills and cancel unused subscriptions.
Chatbots
The ability to webchat to get help is liked by both customers (who can avoid the telephone queues) and providers (who can use their contact agents to multi-task several queries at once). Chatbots can understand natural language and handle most frequently asked questions without human input at all.
Ortec’s Kandoor is a not-for-profit question-and-answer service, currently in use by Dutch pension firm APG. The chatbot has learned thousands of answers to FAQs and, when a new query is asked, this can be passed to a volunteer to provide the answer. This is then added to the knowledge bank to help future customers.
In the UK, Wealth Wizards’ MyEva can provide a financial health check, while Cleo is a chat-based budgeting tool.
Smart speaker integration
Love them or loathe them, it seems speakers that talk back to us are here to stay, and developers are finding ever more uses for them. Often these are frivolous (“Alexa, what does a gorilla sound like?”) but a few providers have also launched more useful ‘skills’ for these speakers.
Smart Pension allows its members, using Google Home Assistant or Amazon Alexa, to ask for valuations and to change contributions. Similar functionality is offered by AJ Bell, with Aviva and EQ Investors only supporting Alexa currently.
Clever as this all is, I can’t help thinking that most of the millions of pension scheme members aren’t ready to engage in this way yet. The majority of Alexa’s 600+ business and finance skills are be aimed at traders of crypto-currency, FX and stocks & shares, where immediacy and regular updates might seem more relevant.
Avatars and artificial intelligence
We’re not too far away from seeing wider adoption of the virtual assistant on our screens. New Zealand-based Soul Machines has been working with IBM Watson to design and refine a human-like avatar capable of two-way interaction with customers, able to detect customers’ emotional responses and use machine-learning to expand its capabilities.
Work on this and similar technology is ongoing to refine avatars’ lip-synching so that hearing-impaired users can accurately lip-read the machines’ responses.
Will customers use this technology?
New technology is always going to have its lovers and haters. The question of trust is never far from customers’ minds when machines take over from humans. So far, the signs are that most still prefer to confirm their actions with another human before committing to serious decisions.
The technology adoption curve suggests we are still at the low volume, early-adopters stage for most of these ideas. Video pension statements have hit the mainstream, with Aegon one of the more recent to have introduced these on its Retiready platform, while personal finance apps are also gaining traction.
Firms have adopted new agile ways of prototyping ideas and will quickly drop those that don’t succeed. With the increasing componentisation of applications accessed by standardised API code (application programming interfaces), trialling new ideas is no longer the costly exercise it once was. Pension providers have no excuses not to get with the times and do more for their members.
Article first published in Mallowstreet on 19th December 2019.
