‘What will I look like when I’m old?’ is a question many people seem to want answered – that is why ‘face-aging’ apps have become so popular. But with 95% of people employed in South Africa retiring on less than 40% of their final salary, a more pressing question is ‘What will my life look like when I’m old?’
The fact that saving for retirement is perceived as ‘unsexy’ is standing in the way of people engaging with it and making it a priority. In a fast-paced age in which people’s most valuable asset is time, digital solutions are irrefutably the future. So in our view, technology will be the most important key to unlocking a change in attitude when it comes to retirement.
With 69% of South Africa’s adult population on smart phones, according to the South Africa Online 2017 report, no industry is exempt from people’s expectation for simple mobile-responsive solutions that make everyday life easier. Our rationale in developing new platforms, products and value-adding services for Sanlam Employee Benefits – such as the app, member and broker portals – is based on our determination to give people the tools to support their financial freedom through the creation of wealth in both the short and long term.
How digital can make financial planning for the future easier than ever before:
1. Give people greater access to knowledge: The Sanlam Benchmark Annual Surveys have consistently uncovered the fact that many retirement fund members are not aware of their retirement savings position until it is too late. This research prompted Sanlam to develop the Retire-mate, an integrated digital solution that provides members with a return on investment calculator, regular reports on the status of their savings in relation to their retirement goals, and soft ‘robo advice’ backed by telephonic support from a retirement benefit counsellor. Additionally, there’s a wealth of educational articles for members to upskill themselves.
2. Make goals realistic and attainable: With wearable tech increasingly linked to rewards, millennials in particular are becoming accustomed to actions being driven by goals. The fewer barriers there are to an incentivised action, the more likely people are to perform it. Digital platforms can remove obstacles like admin, facilitate online transactions, and gamify and reward ‘positive’ behaviours through attainable goal setting and linked lifestyle benefits – both for short and long-term goals.
3. Keep it personal: With the digital age comes a general call for customisation tailored specifically to a user’s needs. Machine learning algorithms, Big Data and regression models make it possible to track a user’s behavioural data in order to make accurate predictions regarding their financial future and current best-outcome decisions. Additionally, Sanlam’s portals make it possible to pull a holistic report on every aspect of a member’s financial wellbeing – from their unit trusts and individual policies regardless of whether they are with Sanlam, to their retirement savings with our fund and their current outstanding credit – providing all the knowledge needed at the push of a button. This can be forwarded straight to an individual’s financial planner.
4. Enable employers to empower employees: In order to attract top talent, employers are feeling the pressure to provide additional benefits to staff, such as access to the company retirement fund, budgeting tools and loan facilities. The contribution level an employee chooses on the first day of work has been shown to potentially have a material impact on their standard of living in retirement. Sanlam’s digital platforms provide an on-boarding ‘Day One’ strategy to alleviate an HR team’s burden of inducting new staff to the company retirement fund. This includes access to a retirement savings calculator and educational videos.
5. Be transparent: People want to know what they’re paying and what value they’re getting in return. Automation means less time needs to be spent on mundane tasks and this allows more value to be directed to members at reduced expense.
6. Partner with every link in the value chain: This includes financial intermediaries. Digital platforms also provide an easy way for brokers to communicate directly with members – communication that members often cite as missing.
7. Make the future of tomorrow relevant today: Ultimately, like an app that provides a glimpse of what it’ll be like to look in the mirror after one turns 65, it’s vital to provide a realistic glimpse into what life at retirement age will look like, in a way that makes the future relevant now. This means upskilling people to know what they need to retire comfortably and to set attainable short- and long-term goals to achieve this.
Tanya Teare is the Head: Product at Sanlam Umbrella Solutions.