Defined contribution (DC) master trusts face increasing pressures from regulation, customer satisfaction, and competition if they do not invest enough in digital services, according to a new study.
User experience research specialist BehindLogin has launched a new report and benchmark of 10 DC providers assessing the quality and usability of their digital interfaces.
Oliver Lane, founder and chief executive of BehindLogin, said consumers increasingly measure their experiences online against the “world-class digital services they use every day” such as Amazon, Apple and Netflix – and most pension providers are falling well short of these levels.
“The gap is clear, but so is the opportunity,” Lane said.
“Workplace pension apps promise to make engagement easy, but many apps aren’t hitting the mark – and even the best performers have opportunities to do more.”
Thomas Joy, Quietroom
Thomas Joy, a consultant at communications specialist Quietroom, said of the research: “Workplace pension apps promise to make engagement easy, but many apps aren’t hitting the mark – and even the best performers have opportunities to do more.”
Digital the ‘best-ever opportunity’ to improve engagement
Standard Life was the best performing provider in BehindLogin’s index, but it scored only half of the available points in the benchmark’s scoring system.
“Some apps are setting new standards for usability and engagement, while others remain reliant on clunky navigation, jargon-heavy copy and browser redirects,” BehindLogin said.
As well as proving frustrating for members and increasing operating costs, poor technology also posed a regulatory risk as it could hamper efforts to comply with the Financial Conduct Authority’s Consumer Duty framework.
It also posed potential issues for master trusts through the forthcoming Value for Money framework, with regulators expected to launch another consultation on the system later this year.
Customer service is set to form a major part of Value for Money assessments, alongside investment performance and charges.
“Digital solutions represent our best-ever opportunity to crack the code on pension engagement… There are huge opportunities for any pension providers brave enough to invest and innovate.”
Iain Oliver, BehindLogin
Service quality metrics proposed in the first consultation included user satisfaction, ease of use, and engagement – although the Financial Conduct Authority and the Pensions Regulator have asked for the industry to suggest other factors and measures for consideration.
Iain Oliver, a non-executive director at BehindLogin and former head of digital at Aviva and Phoenix Group, added: “Digital solutions represent our best-ever opportunity to crack the code on pension engagement. The clock is ticking, but that also means there are huge opportunities for any pension providers brave enough to invest and innovate.”
Assessing the user experience
BehindLogin’s research involved speaking to members of 10 master trusts, all of whom were in the accumulation phase and actively managing their pension savings through their provider’s app or digital interface. The researchers observed people navigating apps and assessed their behaviour in relation to 10 features and tasks to create the benchmark.
For each of these, BehindLogin assessed criteria such as how easy features are to find and access, clarity of language, usability, and innovation.
The features and tasks included:
- Viewing the current value of their pension savings and information about historic contributions
- Making changes to contribution rates, including one-off top-ups and changes to salary sacrifice arrangements
- Viewing investment performance information
- Changing investment funds
- Transferring pensions from other providers and tracing lost pension pots
- Modelling retirement income and explaining options
- Accessing financial wellness information and services, including connecting non-pension assets
- Updating and managing personal details
- Receiving scheme communications
- Accessing help and support, and contacting the pension provider
Legal & General’s digital interface was ranked as the most engaging, while Aviva was rated the best in terms of design and accessibility. Mercer’s app, Mercer Money, was named “most innovative”.
Other providers included in the research were Scottish Widows, which ranked second overall, as well as NatWest Cushon, Nest, Aegon, and Fidelity PlanViewer. A tenth provider asked not to be named in BehindLogin’s research after it was ranked last.
BehindLogin said its results reflected “a competitive landscape where iterative improvements and new features could quickly change positions”.
“Providers that act now to deliver seamless, member-centric journeys will build trust, cut costs, and grow contributions,” the company stated. “Those that hesitate risk disengaged members and sharper regulatory scrutiny.”
