I laughed so much while driving this morning that I nearly crashed the car! I was listening to an advert on the radio for a new Costa Coffee phone app (other brands are available). And what would this miraculous app allow me to do? Order and pay for a tepid milky sludge of my choice from a phone app and have it dispensed automatically from a self-serve machine.
Must be my age; I’m easily triggered at the moment.
Let’s step back and look at this rationally. Is there a legitimate problem this app is fixing, or has someone found an answer to a question that hasn’t yet been asked? Rather than pushing a button and tapping a contactless card, I can now tap a button on my phone and use fingerprint recognition to pay. The power of the thumb!
So yes, a marginal process improvement. But it seems to me that this is a case of technology being applied for the sake of it. I’m sure you’ve seen this before. Something worked fine and then a bright spark changed it simply for the sake of change.
It happens fairly regularly on phone operating systems. On a recent IOS upgrade I found that Apple had changed the way to enter the time for the alarm. It wasn’t any better than how it used to work, just different.
Wouldn’t it be more useful to apply technology to an area where it would really make a big difference?
Take defined benefit (DB) pensions for example. In terms of member self-serve and delivering a modern customer experience, they really lag behind all of other forms of financial services.
We recently spoke with a DB scheme looking to move administrator. One of their big drivers was the desire to provide member self-serve capability. We asked what was currently on offer and the answer was ‘nothing’! When quizzed, they explained that they couldn’t automate the benefit calculations. This is very common especially for schemes running on legacy administration platforms.
There are a number of reasons for this:
- Poor data quality. You can’t expose data to members if it’s wrong or unreliable.
- Administration platforms typically can’t automate all the benefit calculations. Assuming decent data quality you often run out of budget or systems capability before you get to 100% automation.
To solve this issue we need to accept that data quality is a bullet that needs to be bitten to reap significant benefits. There are administration platforms available that can automate all calculations and, as most people now access the internet using their phone, why not develop a phone app for DB pensions?
Sounds simplistic, like all big ideas. We know that it isn’t! However, we also know that it can be done! And it can really transform the member experience and drive down administration costs.
Retirement made easy
Our current retirement pack runs to about 10 pages. It’s pretty typical of the industry. The reason it’s so big is because it has to cater for every member eventuality, cover Lifetime Allowance (LTA) multiple pensions etc.
As you would imagine, we get lots of queries from members who are confused about what forms they need to complete. It’s really not a great experience for members and it adds significant costs to the scheme administration.
Putting the retirement process online transforms it completely
- Gathering details for payment of tax-free cash and pension to the correct bank account is made simple.
- Location services on a phone app will tell you which country the member is in. You can serve up the correct fields for that country. The member can toggle the country if it’s not where the money needs to be paid.
- You can also serve up questions conditionally. So if someone says they don’t have any LTA issues you dispense with swathes of complicated stuff that’s not relevant.
- On our phone app we have worked out that most members are just four clicks away from retirement (assuming no LTA issues and just one pension).
The last part of the process is proof of identity. The traditional approach is for the member to send in all their certificates, birth, marriage etc. We recently moved to using a leader in online identify verification (IDV). So, most members no longer need to send in certificates.
We use an online portal to run a series of checks to establish their identity. We can also ensure that the bank account details supplied are valid and belong to the member.
Coming soon …
On the drawing board for 2021 is the ability for members to use their camera phone to take a photograph of their passport and record a selfie movie. This is piped directly to the IDV provider who, in real time, runs a series of tests and returns a pass or fail.
Overall, we are transforming the member experience with considerable administration cost savings. All from a smartphone app. Now that’s the real power of the thumb!