By Dale Critchley, Policy Manager, Aviva
But it very much feels like we were scratching the surface.
Think about how you use your smart phone or tablet. You can pay bills, video call your aunty in Peru, tell a cab driver where you are without making a call….the list goes on.
As a society, we’ve quickly become accustomed to being able to manage much of our ‘life admin’ with the little rectangular block in our pocket.
Pensions can’t get left behind. Ease of access and functionality is going to be key in boosting engagement with retirement savings.
And greater engagement is going to be vital if we are going to make people aware that a healthy savings pot is going to be essential in later life.
The key to improving accessibility is data connectivity, and I think pension dashboards have the potential to deliver a step change in how we interact with our pensions. Although Brexit, and the associated political uncertainty, has slowed progress, I’ve no doubt that pension dashboards will be delivered.
The industry has proved the concept can work and once built I think it’ll pave the way for integration with all our financial products. Just as you can transfer money from one bank account to another, we should be able to transfer money to, or between, our DC pensions.
There are also likely to be advances in technology that already exists, making it easier for people to manage their pensions through simpler online transactions, facial recognition (aka selfie verification), speech analytics and live chat - with a real person or a robot?
By 2030 we may be hard pressed to tell the difference.
Technology, and more accurately data analysis, is also set to transform communication. We accept targeted ads based on our browsing history or our club-card data, but communication about our pension can be a ‘one-size-fits-all’ annual update. In the competition to spend or save it isn’t a level playing field, but I think that will change. Hyper-segmented pension communications based on data analysis and machine learning is being developed now. Over the next 10 years it’ll become mainstream amongst leading pension providers, delivering automated communications that are truly relevant to the recipient, in a way that best suits the customer – audio, video, text…hologram??
Behind the scenes, I expect artificial intelligence to play a bigger role in delivering investment returns and greater automation of administration will deliver efficiencies and greater accuracy, driving down costs.
This won’t be without its challenges of course. Legacy systems are an issue and commercial pressures will always play a part. But as customers increasingly expect to manage their pensions in a way that suits them, these challenges must be overcome, either through technology or consolidation into more modern schemes.
It’s a big decade for the pensions industry. Let’s come back in January 2030 and see if this article has stood the test of time (assuming we haven’t all been replaced by robots!).
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