When man first went to the moon the Apollo Lunar Module had a state-of-the art computer. The phone in your pocket is now more powerful. Smartphone usage has grown exponentially, and the way people consume services is fast changing. With increased online activity comes a rise in how consumers expect things to work. Ease of use and immediacy of response are prerequisites for a good service.
Quick and easy processing
A friend’s car broke down recently and he was telling me he’d used an app on his phone to report it. The geo location function found the car and he had immediate confirmation that the report was logged. He could have phoned, but the app was quicker. The lesson is that if you make services easy people will use them.
I also now buy my rail tickets using an app and a couple of months back I switched bank account to a startup called Starling.
The sign-up process was a revelation in terms of how fast technology is advancing. I downloaded the app, took a photo of my driving licence using the phone camera and recorded a selfie. Seconds later I got confirmation that my account was approved.
You may be thinking, “well he’s a techie and that’s not how most people do things.” Wrong on both counts. I’m in my mid-fifties and by no means an early adopter.
The Ofcom 2019 UK Communications Market Report shows that the smartphone has now overtaken the laptop as the preferred way of accessing the Internet – 78% to 63%. Smartphone ownership among the 45-65 age group is fast catching up with the youngsters.
As well as being the device of choice for most people there are other benefits in deploying services by means of a smartphone.
Recognise this? It’s a QR code. If you want the detail on how they work point your camera phone at it and see what happens. Apple has had a scanner embedded in the camera for years and the rival Android operating system added this in 2019. QR codes are a great way to get people to content or sites. For example, you could use a QR code to take someone to a video or an app store for a download.
There are big benefits to getting customers onto apps. For one thing it opens an immediate line of communication. You can send notifications and prompt members into action. That’s not to say that apps and online are a panacea; they aren’t. Equally, we shouldn’t ignore the fact that they are gaining currency.
The pension data problem
And so to defined benefit (DB) pensions. As a broad statement it’s fair to say that DB administration systems and member selfserve has yet to hit this peak. Online portals, where they exist, lack the sort of capability members would expect from current financial services.
There are a number of reasons for this.
DB schemes started to take off in the fifties and sixties. Records were paper-based with some moving to mainframes and then onto PCs. The end point for many schemes was technology that was ok then, but not now.
Even more recent systems lack the ability to deliver data in real time to a member portal.
The best current systems may hold data and content on different platforms. That makes it very hard to wire up to a member-facing front end.
The real killer for many schemes is the underlying data quality. Often it’s only at the point of crystallisation that a thorough approach is taken to benefits calculation.
Data may be sitting across a number of systems and some calculations may not be automated.
The holy grail for many schemes is a platform with all functions and calculations automated and a member-facing portal enabling self-serve. Administration costs would reduce and member engagement and satisfaction increase.
Clearly there is a degree of difficulty in getting there, but I also think there’s a lack of awareness of what’s possible. So, let’s suspend disbelief for a moment and design a solution for today.
First we need an underlying platform that can serve benefit and Cash Equivalent Transfer Value (CETV) data in real time. They do exist. And with a unified approach to different tasks and calculations they can deliver timely and accurate benefits information.
The next element allows members to selfserve on a range of tasks from change of address to vesting and payment of benefits.
Obviously, the degree of difficulty and risk involved in these tasks is different. For the latter the real risk lies in ID verification: you don’t want to pay a cash lump sum to the wrong person!
New online validation services are, however, gaining ground. A firm called Hooyu recently embedded their ID verification service for NatWest. It’s probably more rigorous than traditional methods of ID verification and works in real time.
If you can get these elements working then the member interface is pretty straightforward, be it a web or app-based solution. Hybrid design means you can build one solution that works across all platforms.
Pocket pension portal
So, how about a pensions portal you can carry in your pocket?
Give members a QR code to find the app in an app store. They download the app onto their phone and complete the online ID verification. The great thing about phones is biometric recognition. Once logged in they can do it next time with fingerprint or facial recognition.
• View benefits and TV in real time
• Update contact details
• Prompt members for their marital status and spouse’s details
• Push the boat out and go for live chat
• Educate members on their scheme benefits and, where appropriate, their options were they to transfer
• Push notifications to members to prompt them into action and make it easy for them to draw their benefits
It’s all feasible now and actually much closer to reality than you might think!
Owner – Mantle Hosting Limited