Aegon’s Head of Customer and Workplace Propositions, Alasdair Rhind, explains how its digital approach to ‘wage after work’ is changing attitudes to financial planning
The fintech revolution has seen many financial services furnished with flashy new paintjobs and impressive under-the-hood innovations. But what’s that hidden behind the Bank Bugattis and Paytech Porches at the very back of the showroom?
Pensions could be the Ferrari of the digital finance industry – after all, pensions providers manage an astonishing $44.1trillion in assets as of the end of 2018. But whether it’s because young people are ambivalent towards end-of-life planning, or because the clouds of gloom gathered around an ageing population’s pension predicaments have overshadowed the entire industry, pensions simply haven’t got the heart racing in the digital age.
Nor are they particularly well understood. A 2018 survey by finder.com and OnePoll found that 35 per cent of the UK’s adult population say they don’t have a pension, and 43 per cent don’t know how much cash they’ll require in retirement. Just over half estimate £100,000 will enable them to retire comfortably; in fact, the recommended figure, proposed by pensions provider Royal London, is between £260,000 and £445,000.
It’s clear that these two disorientating clouds – one bulging with cynicism, the other with profound confusion – must be dispersed if the pensions industry is to feel relevant and important in the minds of younger, digital native savers.
Enter Aegon: a titan of the global pensions industry, with 29 million customers across 20 countries, including three million in the UK, representing a 27 per cent share in the country’s pensions market. Founded as Scottish Equitable way back in 1831 and now headquartered in Edinburgh, Aegon is well-placed to counter the challenges facing the pensions industry.
The problem, as Aegon’s head of customer and workplace propositions, Alasdair Rhind, explains, is that consumers expect pensions savings to accumulate without any input of time or effort on their part.
“Unlike banking,” says Rhind, “engaging with your pension isn’t something that you do every day.”
He’s right, of course: there’s something groan-inducing about those rare moments when you log in to manage your pension. But with so few contact points with customers – especially since the 2012 ruling obliging employers in the UK to auto-enrol staff in pensions programmes – where and how can firms improve their service and engagement?
Aegon’s answer to this pressing question has been the wholesale rebranding of the pension, and a re-articulation of why pensions matter for young people. Focussing primarily on customer experiences, fleeting as they may be, and on the development of handy digital tools, Aegon wants to transform the very concept of pensions – starting with the word itself.
“We don’t talk about pensions, we talk about a ‘wage after work’,” explains Rhind. “People are more engaged with that terminology, as everyone cares about how they’re going to get paid in the future. So, we’ve introduced our wage after work events, where we have face-to-face sessions with consumers – with advisors not dressed in suits, but polo necks, so we’re far more approachable. We’ve found that these have really cut down on the misunderstandings that customers have around pensions.”
Aegon’s re-energising of the pension may start with terminology, but it doesn’t stop there. The firm, which manages around £140billion in UK assets, believes providing the best possible customer service will brighten pensions’ funeral parlour pallor and make the experience more vibrant.
All Aegon’s work in improving the customer experience (CX) is underpinned by insights drawn from frequent and large-scale customer feedback.
“We are very customer-focussed here: that’s part of our brand’s DNA,” says Rhind. “We have a customer advocacy programme and a voice-of-the-customer survey programme. If we do receive negative feedback, we phone back those customers to understand why they had a poor experience and put things right. When we resurvey them, typically, their satisfaction score goes back up.”
It’s all about the CX
The firm’s satisfaction surveys regularly receive more than 120,000 responses, and it maintains a special customer panel, consisting of more than 9,000 individuals, from whom it seeks feedback on all new messaging. Through these efforts, Aegon is chiselling away at the ideal pension customer experience, sculpting itself a new, more approachable public face.
As a result, there’s an air of friendliness breezing through Aegon’s CX, even when things don’t go right, as Rhind explains.
“Where we have really missed the mark with customers, our call handlers have the ability to send out something called an Aegon cares package –it’s essentially a little present from Aegon to say sorry for letting that customer down.” Then there is the use of behavioural science, which Aegon has made to its digital platforms. In driving digital engagement, Aegon knows that friction kills customer journeys before they
have a chance to flourish – starting with the onboarding process.
“A quick onboarding service is really critical,” says Rhind. “We say precisely how long onboarding will take – four minutes – and we set expectations about what information the customer will have to provide. Previously, our onboarding service asked for your National Insurance number; that was a real failure demand creator. Instead of asking for that information, we ask for stuff that’s top-of-mind, like surname, date of birth, address – things people will know off by heart. That ensures that customers go right through our onboarding service,” adds Rhind.
Nevertheless, friction-free and streamlined services cannot on their own counter the pessimism around pensions. Despite the UK being the second-largest pension market in the OECD, at $2.8trillion assets, UK pensioners receive on average of only 29 per cent of a working wage when they retire. That’s the lowest in the OECD (Organisation for Economic Cooperation and Development), and the average for EU member states is 71 per cent.
Meanwhile, a British Social Attitudes survey recently found that only 65 per cent of British workers feel secure in their roles, and a troubling body of research suggests that, for people aged between 18 and 29, this figure is far lower. So, young people can be forgiven for putting their pension on the back-burner when their present financial security is far from guaranteed.
PensionBee and Anorak Life – two online-only digital disruptors in the pensions space – have both made significant efforts to appeal to younger savers in recent years, but engagement remains low. Aegon’s solution has been to take a different tack: educating consumers, for free, using its retirement planning tool.
The site is a one-stop gateway into the pensions universe, with clear signposts for web users to follow, such as ‘how prepared are you?’, as well as free calculators and interactive pension assessment tools to help build that deeper understanding in pensions that so many people don’t possess. Meanwhile, as Rhind explains, Aegon’s current customers also now enjoy greater transparency when monitoring their pension online.
“Customers want us to demystify pensions and to understand precisely where their money is invested,” Rhind explains. “We have things like digital fund factsheets, which provide detailed insights into fund performance – there’s never been more information available.”
Rhind also recognises that the new wave of pension investors will want their investments to be ethical.
Moves like this keep it in step with societal changes. Another is its single retirement saving solution – where you have an ISA and Pension in one, for life regardless of your employment circumstances changing.
There’s a strong sense that Aegon sees the pensions environment through the eyes of a customer, and has their back – especially at key times such as job changes.
Says Rhind: “We’re focused on providing nudges and support around those critical moments in life. We believe that more needs to be done in that space.”