The power of artificial intelligence should be harnessed to increase pension saving levels, Robert Gardner from consultancy Redington argues.
If we are to close the savings gap and improve outcomes for savers, we need to help them engage with their pension scheme in an easy and interactive way. How do we achieve this?
The electronic personal assistant is your virtual bank manager, identifying ways to cut down on expenditure and save more
One solution could be found in technology. Artificial intelligence systems like Alexa, Amazon’s personal assistant, improve our lives by answering simple questions and doing tasks through our smartphone. These tools are evolving; Alexa now boasts more than 10,000 ‘skills’ or pre-programmed commands. Fewer than 200 of these commands relate to banking and finance.
We can harness this technology to change how pension fund trustees, sponsors and others in the industry interact with pension scheme members.
Levels of engagement are low among pension savers. Electronic personal assistants could change this by making pensions simple and easy to engage with. If you can find the answers you need on your smartphone, it will help you feel more connected to your pension.
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Keep a virtual bank manager in your pocket
Imagine if with the help of artificial intelligence we made accounts easier to manage and gave more insight into how to get the most out of your pension. This would improve understanding and access to information. The possibilities for applying such solutions in pension saving are endless.
What if your electronic personal assistant could make payments straight into your scheme account? What if it could find out exactly how much you have already saved? What if it could even calculate how much you should contribute monthly to achieve your desired amount in retirement?
As banks and insurance companies become open access, there could be opportunities to work with an electronic personal assistant on a personalised basis. The PA is your virtual bank manager, identifying ways to cut down on expenditure and save more.
You could also configure delays (friction points) to make it difficult to make rash or ill-considered purchases. The simplicity, cost-effectiveness and efficiency of this technology could improve pensions and savings. Those who embrace it will see benefits both now and over time as technology and connectivity continues to make our lives easier.
Rob Gardner is a co-founder of consultancy firm Redington
