Nature abhors a vacuum. So do super fund members when it comes to information about their retirement, according to the new KPMG/Challenger report, Guiding members safely down a path in retirement:
The report recommends that messaging around super adequacy needs to be refocused on engaging with members. But funds must also build the capabilities that make member engagement possible, including technology which the industry has been slow to adopt.
Many wealth management organisations are digitising their businesses to meet rising customer expectations, attract and retain customers, and drive down the cost of service.
However, most are still at the experimental stage. Few, if any, have demonstrated the sort of innovation that sets them apart. The biggest stumbling block has been lack of user adoption.
When it comes to digitisation funds are caught in a Catch-22 situation, they must make digital advances to engage with members, but digitisation requires member engagement to demonstrate success and justify further investment.
Targeted investments in digital identity technology offer organisations a way out of this bind. With a digital identity framework, you can:
- Know individual members and other stakeholders
- Collect and analyse data about them
- Securely service them through channels like portals and apps
- Constantly adapt to new digital trends
Having removed the barriers to digital user adoption, you can start to see what works and what doesn’t. For example, with a combination of digital identity and data analytics, you can:
- Target members who would benefit from closer engagement
- Understand individual preferences and identify attractive offers
- Seek consent to interact digitally in new and cost-effective ways
Let’s say you wanted to analyse lead indicators pointing to a career change or retirement, a key trigger point for members to drop out of a fund or switch funds. Anticipating change gives you an opportunity to engage with customers before it’s too late.
Digital identity ties different datasets to the individual so you can action predictive analytics. This may include data you already have, statistical data, data from social networks such as LinkedIn, and/or data from partner organisations.
Of course, you can’t just scrape a member’s LinkedIn profile and send them a message saying, ‘Hey, we saw that you were looking for a new job!’ Some people may be uncomfortable with that, particularly if it came through their employer’s email system.
A digital identity framework keeps track of each customer’s preferences and seeks their consent for data to be used in different ways. It also controls access to data in a digital ecosystem where different organisations – banks, insurers, super funds, even non-aligned businesses – collaborate via APIs to provide services. Collaboration and partnering could be a more cost-effective option if you don’t want to build it all yourself.
Fund managers are sitting on a pile of sensitive and valuable data. Using that data to engage with customers doesn’t make it less secure, though, if the right controls are in place. In fact, digital customer engagement should also enhance data security. That’s another function of a digital identity framework – to adapt to the constantly changing cyber threat landscape by applying risk-based algorithms and supporting a security dialog with individual customers.
Digitisation strategies that focus on member engagement address a number of issues that individual organisations, and the industry as a whole, face. Regardless of what innovations you need to pursue, digital identity technology enables cost-effective customer engagement that removes barriers to user adoption, improves privacy and security, and gives you the flexibility to adapt to a fast-moving technology environment.