The Pension Journey – Stage 2: On Your Way

After finding out how ABAKA can utilise cutting-edge technology to engage members who are new to the world of pensions (here) and seeing how that fits into the overall life cycle of a pension member (here), the third article in our series addresses the needs of a more established pension member.

As a result of their attention and interest being piqued in the engagement phase, this member has transitioned from *not knowing what they do not know* to an awareness of just how complicated the world of pensions actually is. This member is a little older and more established in their career and life in general, and as a result the carefree days of having a relatively large amount of disposable income are in the past and they are looking at putting financial foundations in place for their future.

If we were to define a ‘persona’ for this member, it would be a 43-year old man, Adam. He has a partner that works and 2 children, a mortgage and is a manager at a manufacturing plant.

For Adam and his partner, just keeping up with their day to day costs is their biggest stress. With mortgage repayments and a car loan, credit cards, school fees, holidays and general household expenses, Adam can only afford to contribute 2% of his income to savings.

Since Adam does not contribute to a pension at work, it means he is missing out on his employer’s matching contributions. So not only is he not getting the extra benefit of additional income, his money is saved in a cash ISA and could be working harder.

This is a relatively simple fix and could easily increase Adam’s retirement fund by 40% but given he only has £300 to spend getting advice on his pension (and not the £3000 that is being asked by a local IFA), he cannot find anybody to help him.

Adam would become a brand ambassador for his provider if they were able to help him understand how he could optimise his retirement savings and contextualise how his pension fits into his overall financial picture.

The challenge is that this information has traditionally been siloed amongst individual providers. ABAKA’s proprietary AIP (ABAKA Integration Platform) enables a member to consolidate all of their bank and financial information into one place. Whilst incorporating elements of Open Banking and PSD2, the AIP goes further as it can pull through data from savings and investment accounts, all their pension pots and even their liabilities to present a complete financial dashboard.

It is at this junction that Artificial Intelligence can come in and add significant value on two fronts.

The first is to help the user uncover exactly what they want to achieve and then providing a plan to help them get there. By using AVA (Abaka Virtual Adviser), the AI or (as we prefer) a digital pension adviser can have a conversation with a user to help them define their goals by performing a needs analysis and understanding their appetite for risk, where they see their career taking them and what they want to achieve.

The Natural Language Understanding (NLU) module allows for insight to be derived from the conversations had with AVA. The NLU can extract meaning from the emotion and context of the language used by the user. This can be used to create highly-relevant, personalised and actionable nudges to further help the user achieve the goals they have set out.

For example, the NLU could analyse the types of questions that are being asked and the language used in order to ascertain the user’s familiarity with financial terms. So AVA can then offer Adam guidance or advice to show him how using his workplace pension could top-up his retirement income because of his employer’s matching contributions. The technology will also enable Adam to manage his contributions and payments from within the app.

The second benefit is to take the vast quantities of information and data that the user has and really help them make sense of all of it to help them achieve their defined goals. The ABAKA Financial Engine can continually process 2 to 5 million data points per day for any given user. This includes everything from changes in spending patterns, account balances, day to day cost of living, their monthly income and their current market and risk exposure. It can combine the user data with contextual information such as state and payroll taxes, legislative compliance, inflation, location, property taxes, mortgage and combines it with predictive modelling to account for and offer contextual advice.

The provider that successfully combines real world value-creation for the customer (in the form of an increased pension income) and utilises the customer’s own data to help them achieve their shorter-term goals will engender the most loyal and sticky customers and most importantly, the Assets Under Management.

In a world where big data is grabbing the headlines, it is easy to forget that data is merely the means to an end: to extract actionable information. When that process involves analysing natural language with the aim of bot development, it can be particularly long, arduous, and complex.

Visit for more information on how our conversational A.I. can help you engage your customer, no matter what life stage they are at.