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How Technology is Driving a Pension Revolution


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At IRESS Live 2016 Chris Pitt discussed how technology is driving a revolution in how we interact with our pensions.

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How Technology is Driving a Pension Revolution

  1. 1. How technology is driving a revolution in how we interact with our pensions Chris Pitt – Head of Market Analysis June 2016 Version: FINAL
  2. 2. 3 Drivers Tech game changers? So what? Agenda
  3. 3. 4 POLITICAL Self reliance Real value of benefits Drivers ECONOMIC Public spending and debt 2005 2016 Deficit 450b 1.53t Pensions spend 86.3b 149.8b SOCIAL Growing and aging population 1990 2015 2040 Life expectancy 75.9 81.3 85.6 Population 57.2m 64.6m 74.3m TECHNOLOGICAL Digital revolution - as profound as the ‘industrial revolution’. Access the Internet several times a day IRESS Data, Disruption and Digital Consumer report 81%# of Recipients
  4. 4. 5 Barriers to be overcome? Some (not all) of the key inhibitors:- 1. Understanding what they have already got 2. Providing data to others (to buy products, to get advice) 3. Analysing that data and deciding what to do “We need to get more people saving more money for their retirement”
  5. 5. 6 1. Understanding what they have already got 2. Providing data to others (to buy products, to get advice) 3. Analysing that data and deciding what to do Tech game changers? 1 Data aggregation 2 Digital passports 3 Digital advice
  6. 6. 7 1 Data aggregation
  7. 7. 8 What FinTech innovation would people most like to see in the future? IRESS Data, Disruption and the Digital Consumer report ( What do you really really want? The ability to view their financial world - bank accounts, mortgages, investments, insurance - in one place
  8. 8. 9 HMT sponsored working group:- UK Open Banking “Open APIs should be created to enable services to be built using bank and customer data. These would include open data about products and services as well as shared data about bank transactions that individuals or businesses can choose to share through secure and controlled means”.
  9. 9. 10 47% not confident how much their pension is worth Source: Which? Pension Dashboard “The concept is so compelling that it’s already an established part of the pensions industry in other countries. Savers in Denmark, Sweden and the Netherlands all have access to a dashboard of some sort.” Darren Philp, The Peoples’ Pension 2019?
  10. 10. 11 2 Digital passports
  11. 11. 12 A third of people would save or invest more if it was easier to transfer money and open saving or investment products Source: TISA Digital passports • Your online assured identity • Already an option for accessing UK Gov’t services • Barclays • CitizenSafe • Digidentity • Experian • Post Office • Royal Mail • SecureIdentity • Verizon Certified companies
  12. 12. 13 3 Digital advice
  13. 13. 14 eCommerce in retail sales * Source: IMRG Capgemini eRetail Sales Index 24% of retail sales took place online £114bn UK ecommerce sales The tech revolution in the high street, 2015*
  14. 14. 15 Life Co’s and asset managers making major investments The Fintech revolution ABERDEEEN ASSET MANAGEMENT Acquire Parmenion BLACKROCK Acquire FutureAdviser INVESCO Acquire Jemstep SCHRODERS Takes stake in Nutmeg LV= Takes stake in Wealth Wizards FIDELITY Fidelity acquire eMoney Advisor
  15. 15. 16 In a recent webinar, IRESS asked advisers what they thought about robo-advice: The adviser view? 65% 9% 23% Opportunity Threat Undecided 2016: A Robo Advice Odyssey available on YouTube
  16. 16. 17 Stuff & Nonsense! Real challenges Who cares? Many will try - many will fail Application technology to ‘self-led’ advice Consumer engagement Client acquisition Consistency across channels Compliance It’s all about the PROPOSITION! What’s in a name? What is ‘Robo-Advice’?
  17. 17. 18 Digital advice – some examples Aegon Retiready • Consumer facing • Extensive interactive education • Tools & calculators • FREE! LV= Retirement Wizard • Full regulated advice • Specific product recommendations from a range of leading providers • Online (with telephone support) • £199 - one-off payment for advice In the work-place & linked to auto-enrolment
  18. 18. 19 It’s not going away! • Segment and design accordingly • Expect an omni-channel world • Aggregate data for your clients • Encourage client online access So what?
  19. 19. 20 Create a technology roadmap Attract new clients and markets Build new propositions to engage new clients • New client segments? • New brands? • Different UX? • New ways of acquiring clients? 3 Engage existing clients Through self serve and client facing tools • Corporate website • On-line fact-find • Client portal • Tools & calculators • Social media 2 Streamline current advice processes Use existing tech to cut costs and time • RPQ • Cash-flow analysis • Suitability Letters • Automated payment reconciliation 1 Underpin with an omni-channel platform
  20. 20. 21 We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction. Bill Gates A final thought ……
  21. 21. Thank you Email: Mobile: 07920 135708 Chris Pitt Head of Market Analysis LinkedIn: Christopher Pitt Twitter: @chrispitt11