Financial wellbeing: How technology can drive better financial inclusivity
Financial inclusivity is all about removing barriers and there are still too many in the financial services industry. Barriers include complexity, inaccessibility and language. Even though the mechanics of most products in the main are simple, the financial services industry is one that absolutely loves jargon which immediately creates the impression of complexity. The result being that people glaze over and switch off at the mere mention of pensions or any other financial product – they’re something that you only deal with when you absolutely have to.
Let’s consider financial wellbeing in the workplace. You’ve got a great approach with every product someone could need available. You might offer financial education that does a good job at raising awareness and teaching people about the merits of saving. You might also offer one to one advice or guidance meetings which give people the confidence to act. But despite all of this, engagement levels are low – the only people who are engaging are those who you could have guessed would have engaged – higher earners, for example.
In effect, you’re preaching to the converted and still not reaching those who have yet to turn the corner. But why? In all likelihood it’s back to the barriers identified earlier – for a lot of people it all feels too complicated.
If I’m saving for my first home and I’m convinced that a Lifetime ISA is the right product for me, I need to be able to open one up in a matter of minutes without any human intervention. I also want to be able to manage it in the same way that I manage most other things in my life, through a mobile app. If it’s anymore complex than this – I’m less likely to do anything.
And it’s exactly the same for pensions. People want to be able to access their pension via a mobile app and be able to transfer in other pensions, change contributions and see what their pension is likely to be worth at retirement instantly. They don’t want to wait for their annual statement which comes along with a whole load of bumf, which in most cases ends up in the bin.
It’s true that for some reason, the pensions industry has lagged behind most other sectors when it comes to embracing technology and it’s hard to understand why. We still have the issue of people, especially younger people, not engaging enough and it’s now more than obvious that it’s not just about communications, a massive part of it is about lack of accessibility and technology is the answer.
We only need to look at how it has changed banking to see what it could do for workplace pensions and savings. Just 10 years ago it took ages to open a bank account; now you can be onboarded in a matter of minutes – it’s safer and more secure, you’re not faced with reams and reams of paperwork and you can do it anywhere, at any time without having to see or speak to anyone. It’s not something to dread – it’s now a simple process and simplicity promotes inclusivity.
Once you have an app-based journey, straight away it forces a change in language away from jargon. To be successful, a mobile app must be intuitive and so any words that are needed are kept to a minimum and can be easily understood by the user. It doesn’t mean that people don’t get the information needed, it’s just presented in a way that is more user friendly – a way that is more engaging.
The acid test for any pension scheme or wider financial wellbeing programme is comparing the employee experience or journey to the revolutionised banking process and if it doesn’t compare, which it won’t if it’s not truly technology lead, it’s going to fail to do its job – people are not going to engage.
The author is Steve Watson, head of proposition at Cushon.
This article is provided by Cushon.
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