Member communication in the digital age

We live in the age of information overflow. The channels, methods, and frequency at which we receive information have drastically changed over the last two decades. Mass media such as TV and radio have given way to personalized news feeds and social media interactions.

Our ever-increasing reliance on digital devices has had adverse consequences on our attention span and emotional development. At the same time, this very technology allows people to interact with the world differently. Many corporations and brands fight for our very short attention span by offering unique user experiences based on AR/VR (augmented reality/virtual reality) or AI (artificial intelligence) technologies. This is not about being trendy anymore. It is a business necessity to stay competitive and increase sales to current and potential customers.

In spite of covering millions of current and future retirees and managing trillions of dollars of pension assets, the global pension industry is considered a laggard when it comes to embracing innovation such as contemporary customer experiences (CX). For individuals who have come to expect a contemporary user experience in many dimensions of today’s life, the pension industry is decades behind in communicating and engaging with members. The annual pension statements and information booklets do not cut it anymore.

Why are we here?

Canada has oligopolistic market structures across many industries. That is a fact of life that we have to come to accept as an unintentional – and somewhat undesirable – consequence of our uniquely disproportionate geographics and demographics. The pension administration industry is no exception. A limited number of third-party pension administrators service many employers and employees, resulting in a non-competitive market.

As the industry goes through an accelerated digital transformation post-COVID, most resources are dedicated to upgrading legacy infrastructure and record-keeping software. In this fight for scarce technical resources, member   communication is mostly an afterthought rather than a core piece of technology in need of an overhaul.

One argument is that there are still no well-defined metrics for evaluating the effectiveness of a CX strategy. We believe, however, that many metrics currently used to measure member satisfaction can serve as the basis for CX with the additional benefit of offering members a more engaging experience.

Why should we do better?

Pensions are instrumental to the future financial security and well-being of individuals. But the more complex we make it for them, the less they can reap the benefits of a pension. Member communication is not just a fiduciary responsibility, but more so a moral obligation.

As we collectively overcome adoption challenges, there are many who benefit. First, employers are looking to get the most value out of the pension and benefits offered to staff. The value of retirement benefits, as a significant part of the total compensation, is not apparent to many employees. Further, employees who understand their benefits are more engaged, contributing to better corporate results. Finally, CX strategy implementation also provides an opportunity for administrators to distinguish themselves and be more competitive.

What needs to be done?

There is much to be learned from other industries, particularly retail, when it comes to implementing a customer experience strategy. Today’s customer experience and the benefits can be characterized as just in time/timely, personalized, targeted, and omnichannel. These should enable learning experiences, make the individual feel valued and in control, and build trust and awareness.

A member is much more likely to learn about a complex pension topic if they search for it on their own and find a solution at hand, either through AI-like counseling or easy to navigate training material. They also feel more engaged and in control if the experience is personalized to their needs, woes, and worries. Finally, as fiduciaries of retirees with varying levels of digital knowledge and connectivity, we need to approach this through different traditional and digital channels to maximize reach.

How should we get started?

There are some legitimate concerns and barriers for implementing a CX strategy in the pension world with the most prominent ones being privacy and data security. However, they should not deter us from envisioning a better experience for members. The biggest role of industry leaders is to have a vision for the future of member experience. This vision drives the success metrics and the execution strategy.

All technology pieces from natural language processing (NLP) used in comprehension of member questions to cybersecurity measures to protect member data have already been developed and are extensively used in other applications. By leveraging these technologies, we can engage members emotionally and empower them with the right tools to make better retirement decisions.

Strategic partnerships between pension providers and fintech firms in countries like the UK – with a bustling fintech scene – have proven successful. Different technology pieces can be combined and integrated with an enterprise software to drive innovation in this space.

Canada is well-known for world-class pension plan design. We also have world-class teaching institutions in machine learning and AI as well as a thriving technology sector. The fusion of these elements enables us to take the lead in contemporary pension communication globally.

The need is real, the vision is clear, and the technology is there. Are you ready?

Leyla Imanirad is the Chief Empowerment Officer at Pensionbar, while Saman Khodai is the Director of Pension Transitions.