...it is vital that PFA's fully evaluate the business functionality of their digital & technology platforms, alongside their marketing, sales gaps in their processes, systems, and people
Emerging technologies in the world at large are facilitating more efficient business management at much lower price points and the pension industry is not left out. Opportunities are everywhere and technology is no longer a limitation, but is your pensions company ready and open for digital transformation?
The modern day customer is embracing technology and enjoying its benefit with information at their fingertips, real-time applications providing daily value, based on live data. In a nutshell, people have never been so empowered where putting their money is concerned.
The pension industry like banking has undergone a seismic shift in its business model from traditional paper systems to online and then web/mobile based applications, which eventually has led to a fundamental shift in culture. Now it is vital that brands fully evaluate the business functionality of their digital and technology platforms, alongside their marketing, sales and information security gaps in their processes, systems, and people.
Pension industry is a complex one and the evolvement of digital is often a new pain point for PFA’s. Keeping in view the emerging business landscape, PFA’s need to be careful about the do’s and don’ts while addressing digital transformation challenges. There are digital myths within the pensions industry and other companies, as to what digital means and what the winning approaches are in address digital challenges. These myths about digital have lead companies into blind alleys and wasted investment. The key myths going around in the industry are:
Myth 1: Digital is just another channel
Digital isn’t just another channel; it’s a deployment method. And as such, it calls for a complete shift of consciousness and creates the need for a new approach to doing business. It goes beyond just advertising to questioning the root of the business, the business model, products and service offerings. Customer’s today have access to a smartphone, a tablet, a laptop, and use each of them for different purposes, sometimes at the same time. They prefer to transact and receive updates via a mobile, carry out research and complete simple purchases with their mobile devices but will revert to telephone or face-to-face as decisions become more complex. So, digital isn’t just another channel but a broader platform for information dissemination, sales, retention, customer service and a whole lot more.
Myth 2: Digital is just about technology
As wool is to sheep, so is digital to technology; this is not to say that you can’t get meat from sheep. Most PFA’s leave digital transformation to IT departments alone since it’s all about devices and networking when in actual fact an approach that is IT-centered rather than business-led is likely to struggle. Appropriate supporting technology is obviously important, but there are other aspects essential to digital development:
A customer-centred culture: Customers come to you to solve a problem in their lives. Success in digital depends on finding ways to help customers to do that effortlessly so they can come back for more. That demands a culture that makes every interaction about the customer, rather than about internal priorities, easier said than done.
Customer experience design: Once you are clear on how you want to engage with customers – and what will make them engage with you – it is important to design processes that don’t ruin your desired customer experience. A common mistake in digital design is to present customers with a process that works superficially but becomes too difficult at the smallest detour from the laid out plan. However good the chosen technology, it is likely to be badly implemented or poorly adopted unless the impact on the wider business is fully understood and the organization as a whole (staff and technology) is made ready to support digital technology developments.
Myth 3: Digital is not about relationships
PFAs for many years have left its relationship management to third parties (marketers) to get to know their end customers and sell their products. This has led to ‘customer relationships’ that amount to just collecting premiums, sending the statements and ‘letting sleeping dogs lie’ until maturity, retirement, lapse or death.
This ‘fire and forget’ approach has led to people losing interest and trust in PFA’s. For customers, too often the product purchased has failed to deliver on the promise, but they have had little support or guidance from their provider and have disengaged or felt disenfranchised. Digital technology can enable a more active dialogue, increase two-way communication and engagement, but companies will also need to invest in reconnecting emotionally with customers. In that context, having a strong brand provides a way to stand out from the masses. However, brand and what the organization is perceived to stand for will be very publicly scrutinized and any incongruence’s exposed for all to see.
The only way to ‘get it right’ consistently is to establish the culture, values, and behaviours that genuinely put the customer first, worthy of trust and can withstand the public scrutiny that instantaneous sharing of experience creates.
Myth 4: Digital is optional
The pension’s industry a conundrum. The product is a promise: inherently virtual, often existing only in electronic form on a system somewhere. And yet advice and sales remain heavily people-intensive and customer service is still mostly done by telephone. The value in the value chain is migrating towards the customer relationship and already advisers, asset managers and life and pensions companies are converging on the same space.
To survive and thrive will mean establishing stronger relationships with more customers, at increasingly competitive price points, while operating more cost effectively. That can only happen if customers are doing more for themselves and the human element – if both marketing and service – is concentrated on the points where it adds the most value. Digital offers the tools to achieve that, although it will require a significant commitment, changes and a willingness to experiment and learn. As competitors home in on the same space, the price of delay is likely to be extinction.
Myth 5: Digital won’t change my business model
Customer expectations of how they can interact with companies have drastically changed over the years. Customers expect greater accountability in meeting their needs throughout the span of the relationship. PFA and other advisory businesses are competing for the customer’s trust in an increasingly challenging commercial environment.
These external changes put pressure on the internal resources of the organization and how they are used, particularly:
People: Companies further along the digital path have learned that success requires a workforce of digital specialists. Typically, this means recruiting new digital skills rather than ‘growing your own’. The skill set is very different from traditional pension skill sets, and the pace of change (slow) makes it hard to keep current without bringing in specialists from outside. That means supporting a very different workforce with very different expectations – and somehow finding a way to put out more digital product, compliance, and risk skills alongside them. One example of the challenges that it may bring is that senior technology staff are used to the old model of just making sure IT infrastructure is working but not really involved in the marketing and sales of product and services.
Change: Other industries such as banking have found that even the most successful app or website has a lifespan of months rather than years. Being able to deliver change quickly and efficiently is essential. Cycle times need to be cut through the test-and-learn, prototyping, and small quick delivery chunks, without losing good practices such as strong communication and joined up thinking. Learning from rapid incremental change where failures are small is better than theorizing large, delivering slowly and failing big.
Digital transformation is well past infancy and has the potential to deliver significant benefits for PFA’s, from both a cost and revenue perspective. So, the question is not whether you can implement a digital strategy, but whether your digital strategy can help you change your business model to one that is both competitive and profitable in the new environment.
Customers have evolved and are now empowered with a wide range of options and channels where they can reach and connect with pension providers. This abundance of options, technology, platforms, and channels has called for PFA’s to change their business models in order to remain competitive. As your brand embarks on this digital transformation journey, you should address the myths and misconceptions at the outset in order to stand a greater chance of success.
How to address the myth? Say Hello to us at firstname.lastname@example.org and let’s begin the journey to a digital 2017 together.
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