Learning from the disruptors: strategies for pension innovation

The collective pension fund in the Netherlands reaches a total of 160 billion euros. These funds have existed for over 70 years and have always been more collective than private. Compared to other financial institutions, we can see that not much has changed and that the industry is a bit behind on the data-driven evolution. What is the potential for innovation in the pension field and once identified, where to start? In this blog, we sum up some developments we've noticed in other industries and share how the pension industry could take the next step forward!


Changing the system to stay relevant

Like all systems, the pension industry needs to be able to adapt to new standards to remain relevant in the changing context. Following the provisional pension agreement from June 2019, we expect a couple of changes that could disrupt this industry. Finalising this agreement is expected to take 1.5 to 3 years. The agreement is causing uncertainty as the system will be more flexible, affecting both funds and their users, where clarity and certainty are essential for a trustworthy pension retirement. As the system is changing in the next couple of years, so will the market. Established players will have to innovate their services and new players will arise. How to stay ahead of the curve?   

Development to keep an eye on

When we look at what’s going on in the industry we see some interesting developments. We’ve listed four developments we saw that could impact the pension industry.

Predictive modeling

When you’re turning your organization into a more data-driven company, you could start working with predictive modeling. Like the word implies, with this type of modeling you aim at predicting a certain outcome.

Fully automated services like Pensioenbee

Fully online services have proven to be a successful new business model. Examples are Bunq, Pension Bee, or better.com. These services are fast and fully digital, attracting younger clients and aligning more with their lifestyle.   

Integration with third party applications like Yolt

Integrate your information in existing applications like a banking app, to follow the user instead of trying to attract them to another new app. Doing this allows you to stay relevant for your loyal users.

New business models like Blair

Redefining your service could help you to come up with new ways of attracting new clients. Blair starts offering services to students, offering study loans. After the loans are paid back, Blair continues as your service for saving up for retirement.   

Taking the next step forward

1. Create new business models

Whereas the government is tightening the rules in financial technology, they are loosening them for pensions. Opening up the market will create space for new business models, but also new competitors. A good example could be how you might use PSD-2 data to explore new business models.

2. Experiment with data and automation

Pensions aren’t yet making a lot of profit as most of the money will go to the people receiving their pensions. This resulted in fewer resources for jumping on the data automatisation train. Pensions have the potential to use their data in innovative ways, which could help them improve their services

3. Serve new upcoming customer segments

In the future we will be living and working differently, becoming more and more flexible with how and where we work. This is creating a new segment of clients that need to take care of their own pension, as we expect an increasing amount of freelancers. If you want to reach these people, you need to rethink and strategize your service and communication as a pension fund. How can you make their lives easier?

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