Entering the matrix: Taking pension tech to the next level

The AI arms race between Apple, Google parent Alphabet and Facebook heated up last week with Apple’s acquisition of emotion analytics specialist Emotient.  

Emotient, the latest company to fall into Apple’s orchard, recently filed a patent on new software that can interpret human facial expressions.

There is a drive for products… [that] aggregate assets onto a platform and enable a single view – of which pensions is just one part

Debbie Falvey, Aon Hewitt

But as tech market leaders hone propositions to better identify, interpret and engage their customers, how can the pensions industry put new technologies to work in improving pension saving?

Daniel Taylor, head of administration services at consultancy Premier, said the pensions industry currently lags far behind the retail sectors in harnessing the latest developments.

Many admin providers and consultants looking to boost their offering in 2016 will focus on improving their online member education, he said. 

“It’s not robo-advice but robo-guidance – easier ways to self-service education around [defined contribution] options,” said Taylor.

“Over the next few years, that will develop further, pushing all member engagement online.”

Consolidation

Karen Bolan, head of engagement at communications consultancy AHC, said consolidating information for members will be crucial to driving up engagement over the coming years.

“Allowing access to information to make decisions is key, and [interfaces] easy and engaging to use,” she said.

Breaking down the complexities of tax and investment decisions must be a priority for the industry as those nearing retirement face a much broader set of decisions under new pension freedoms, Bolan added.

“People don’t understand all the factors,” she said. “The nuances of tax scenarios are potentially going to hit people quite hard.”

Assessing the current market, Bolan said propositions are increasingly building on the principles of gamification and smartphone-based apps designed to appeal to a new generation of pension savers.

Jonathan Underwood, director at consultancy JLT Employee Benefits, said numerous applications and modelling tools have already been brought to market but are typically an added extra, paid for by sponsoring employers in trust-based arrangements, rather than being part of a contract-based offering to individuals.

“Those tools can be quite a catalyst just to get people interested in pensions,” he said.

There is opportunity for trustees and their advisers to embrace developments in data visualisation technologies, Underwood said, which would provide the market with a more in-depth picture of saving trends and discrepancies if harnessed effectively.

The complete picture 

In its 2014 review of the annuities market, the Financial Conduct Authority promoted the creation of a pensions dashboard, allowing savers to view pots scattered through the course of their career in aggregate.

In September, ecommerce standards and services body Origo announced plans to develop a ‘pension register service’ over the next two years, into which government agencies, pension providers and administrators can input individuals’ data on state pension and lifetime savings.

Debbie Falvey, senior consultant at Aon Hewitt, said the dashboard “ought to work”, but tools enabling more holistic oversight of their financial circumstances are more useful to savers.

“There is a drive for products… [that] aggregate assets onto a platform and enable a single view – of which pensions is just one part,” she said.