We’ve all seen the headlines. Artificial intelligence, machine learning and robotics will revolutionise our industry. Some 15 percent of private sector jobs will be absorbed by robots in the next ten years. And the blockchain’s capabilities are steadily growing in the background.
With the threat and promise of technological breakthroughs breathing down our necks, pension administration providers could be forgiven for biting their nails. It's little wonder we’re all too busy scrambling to stay relevant to focus on the task at hand.
But instead of struggling to prove our worth against such a formidable opponent, why not use the tools that are already under our noses, rather than waiting for the four horsemen of the apocalypse to arrive?
What too many pension administration providers fail to realise is that they have the power to be proactive now. If we could only stop succumbing to our bewilderment and fear at the thought of AI and robotic breakthroughs; we might just realise the change can already be made.
Allow me to explain.
What innovation really looks like
The pensions industry is awash with animated predictions about robotic breakthroughs. Whether you aspire to achieve lower operating costs and increased efficiency, or worry about your job being wiped out completely, burying your head in the sand is no longer an option.
It doesn't take Nostradamus to conceive of a world in which the adoption of AI solutions will be commonplace. But it does take some preparation.
You see, I believe the revolution is already within the grasp of the administration sector. We don’t need to sit on our hands waiting for the technology to tell us how to liberate our industry from the challenges that have plagued it for decades.
Last year marked the 10th anniversary of the iPhone, arguably, one of the most disruptive and successful technological breakthroughs of a generation. The visionary Steve Jobs turned the humble phone into a personal computer, keeping us constantly online and connected. So connected, in fact, that over half of the UK already checks their mobile within 15 minutes of waking.
Most of society heralds Mr Jobs as a great innovator; yet, I would argue he was more of an opportunist.
Of course, it’s impossible not to acknowledge the vision, artistry and skill with which Apple developed and delivered their product. But contrary to popular belief, they did not invent the core elements that people associate with this breakthrough technology.
The touchscreen, digital music stores, voice recognition, video calling, and GPS were all already in existence.
What Apple so masterfully did was to knit together these existing solutions to create a flawlessly comprehensive end-to-end user experience. Through packaging up these existing tools, Apple brought to market a disruptive solution that changed our lives forever.
What pension administrators can learn from this
There are lessons for the pensions industry in Apple’s example, especially for pensions administration.
The tools already exist to address many of the industry’s ills.
We do not need to wait for AI or robotics to help us improve efficiency, reduce costs or develop the member experience. Neither need we be forced into sitting around and watching our solutions become redundant.
What we need is the will, investment and foresight to apply the technologies we already have in a way that is accessible to all schemes. With the digitally nomadic lifestyles of our customers, we know how and where to meet them online. We already have the capability to deliver the speed and choice they demand, and place our packages on their mobiles.
We can automate processes and calculations, so that our time-pressed target’s attention span doesn’t expire before we’ve provided the answers. Calculation automation technology has existed for decades and it’s probably the one that’s had the greatest impact on pensions administration. Yet, in so many cases, it is still being poorly used.
Automation done well is an unrivalled way of improving efficiency. But poor automation is worse than no automation at all. Too many providers are still throwing up inaccurate calculations despite the integrity of the data. Costs are driven up by the need to cover our tracks and rectify human error. In short, we need to stop fumbling around in the dark with the tools in our reach before we can even contemplate what’s down the line.
AI, robotics and machine learning are all fantastically enticing technological developments. They should, however, be evolutionary developments based on a foundation and tradition of successful technology adoption and application.
If your pension scheme or administrator is not delivering the basics now, forget about thriving with AI as we move into the future.
Have your iPhone moment now by learning from Apple’s experience and weaving existing technologies together with poise and expertise. With the will, focus, and investment you can make the most out of automation and digital tools now. And, in doing so, drive down costs and reduce errors while preparing your team for the brave, new world to come.
Garry Wake, Managing Director