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
revolution in how we interact
with our pensions
Chris Pitt – Head of Market Analysis
June 2016
Version: FINAL

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Drivers Tech game
changers?
So what?
Agenda

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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

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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”

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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

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1
Data aggregation

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What FinTech innovation would people
most like to see in the future?
IRESS Data, Disruption and the Digital Consumer report (iress.com).
What do you really really want?
The ability to view their financial
world - bank accounts, mortgages,
investments, insurance - in one place

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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”.

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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?

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2
Digital passports

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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

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3
Digital advice

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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*

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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

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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

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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’?

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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

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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?

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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

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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 ……

22. Thank you
iress.com
Email: chris.pitt@iress.co.uk
Mobile: 07920 135708
Chris Pitt
Head of Market Analysis
LinkedIn: Christopher Pitt
Twitter: @chrispitt11