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How technology is driving a revolution in how we interact with our pensions

Chris Pitt – Head of Market Analysis June 2016Version: FINAL

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Drivers Tech game changers?

So what?

Agenda

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POLITICALSelf reliance

Real value of benefits

Drivers

ECONOMICPublic spending and debt

2005 2016

Deficit 450b 1.53t

Pensions spend 86.3b 149.8b

SOCIALGrowing and aging population

1990 2015 2040

Life expectancy 75.9 81.3 85.6

Population 57.2m 64.6m 74.3m

TECHNOLOGICALDigital revolution - as profound as the ‘industrial revolution’.

Access the Internet several times a dayIRESS 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?

1Data aggregation

2Digital passports

3Digital advice

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1Data 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 worthSource: 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’ Pension2019?

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2Digital 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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3Digital 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 acquireeMoney 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 challengesWho 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 examplesAegon 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 marketsBuild new propositions to engage new clients

• New client segments?• New brands?• Different UX?• New ways of acquiring

clients?

3Engage existing clientsThrough self serve and client facing tools

• Corporate website• On-line fact-find• Client portal• Tools & calculators• Social media

2Streamline current advice processesUse 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 ……

Thank you

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Email: chris.pitt@iress.co.ukMobile: 07920 135708

Chris PittHead of Market Analysis

LinkedIn: Christopher PittTwitter: @chrispitt11