“Blown away”: how data, tech and AI are transforming pensions

Digital innovation, data and AI in pensions is already a reality, with more to come

“I’m blown away by what you’re doing” was what one surprised adviser said to me after Scottish Widows’ adviser summit in London, in May.  

They were commenting on how Scottish Widows is spearheading the shift from traditional financial services to a digital-first approach which harnesses technology, data, and AI to improve member outcomes.

Data-driven scheme insights

This Autumn sees the launch of our self-serve data insights tool, Navigate, which employers will be able to use to see how their scheme members are engaging with pension saving and benchmark that data with other schemes in their industry sector.  

That’s just the tip of the iceberg. Employers and advisers can use it to understand their schemes better, have solid, data-driven conversations and take actionable next steps to help members get better outcomes for their retirement.   

They can see which groups are saving and any demographics who aren’t contributing enough towards their future. And we already know how pressing this issue is, with around one-third* of people expected to face retirement poverty (PDF, 7MB) unless they take action to save more, according to Scottish Widows’ Retirement Report 2023.  

With that in mind, Navigate’s next best actions feature suggests relevant campaign and engagement material which employers can send on to groups of employees who will benefit the most, monitoring the impact.

Launch plans

A group of employers who have pension schemes with us will be early adopters as part of the initial roll-out, building on how we’ve been developing Navigate with regular employer input over the past 12 months. They’ll be helping us shape and fine-tune how Navigate works before advisers get access towards the end of 2024.  

They’ll also get solid support from our relationship managers to make the most of it.  

What makes Navigate different from competitors’ offerings is the weight Scottish Widows is putting behind it, with a 30-strong dedicated team to research, prototype, develop, deliver, and continually improve it, based on data, learnings and insights.   

Our goal is for Navigate to become the leading data and insight product in the workplace market, partnering with employers and advisers, to help members get better outcomes. It’s why we’ve created a constant feedback loop to continually improve and invest in it and that’s the ongoing focus for the Navigate team.  

We believe it’s going to be invaluable for scheme governance, with advisers and employers alike getting faster and more in-depth information without needing to wait for the quarterly cycle as they do now.  

Open finance initiative

It follows on from the launch earlier this year of the Scottish Widows open finance partnership with Moneyhub which, in just a few months since launch, has seen a bigger uptake than anyone could have envisaged – and puts members in control of their finances.  

To date, almost 9,000 pension members have linked up their savings, banking, pensions, and investment assets worth close to £1bn from other providers (74 so far, with many more available soon) into the Scottish Widows app.   

One very interesting development is how many are using that open finance capability within our app to build their own pensions dashboard. They see the pensions they hold elsewhere alongside their Scottish Widows one, so that they know what they’ve got overall. That’s on top of the half a million times – and more – our app is used every month by people managing their Scottish Widows pension.  

With Navigate, employers will have the tool to nudge them to save enough. Tackling pension adequacy levels is firmly in all our sights.

Impact of AI

There’s much more coming on the digital and tech front, and the next tranche of tech developments coming onstream is incredibly exciting, with the strength and expertise of being part of Lloyds Banking Group helping to drive the pace of change. 

Not only has Scottish Widows got access to the second largest data set in the UK (after the NHS) to give us valuable customer insights, we’re also already using AI in a number or innovative ways. One is shaping skills and service in our customer care teams to make that an even better, personal and more efficient experience.  

There is a lot more on the AI front to come next year as we build it into our websites and marketing to enhance and personalise member engagement in new ways. 

“Blown away?” I’d agree with that. 

Sources

* Scottish Widows Retirement Report 2023 (PDF, 7MB)