Has the disruption of technology in financial services caused a shift from traditional legacy systems?

The market is changing, and quickly, with a passion to drive more efficient and scalable software.

Recently I was delighted to join a panel at the Finnovex Middle East Hybrid Summit, where there were lots of conversations about the innovations that are making their mark in our industry. The main focus was on how digitalisation creates  improved user outcomes, and the user journeys themselves. 

This all aligns strongly with my own experience in the industry. The context of COVID-19 has accelerated digital changes across many industries with RetireTech and retirement plans being no exception. Savers' lifestyles have changed and we have seen this on a global scale with users calling for flexibility, guided customer journeys and support, with particular emphasis on being able to access and manage their funds online. In a report we recently published. From a report we published recently, The Future of Global Retirement, we spoke to over 6,000 savers and found 72% of people want at least some involvement in managing their finances for retirement.  We also found that for 49% of savers being able to access their retirement account online is crucial when it comes to choosing a retirement plan provider.  After all, long gone are the days of queuing on the high street, with neo banking and RetireTech harnessing the power of digitalisation to give users online inclusivity.

We think, and so do many others in the industry, that the majority of traditional legacy banking systems will struggle to last the test of time without embedding digital  transformation into the company strategy and culture. The market is changing, and quickly, with a passion to drive more efficient and scalable software. It’s all about better customer experiences and outcomes in retirement, whilst also reducing costs and regulatory risks. 

Here are three things which I think need to be integral to a digital strategy for it to keep pace in this ever-changing industry.

1. Getting to grips with legislative and regulatory changes

Keeping a keen eye on reforms across the globe could lead you to new business opportunities, as well as ensuring that your products and services are compliant, thus saving you money in the long run. 

2. Knowing what you are offering that is scalable and different in the digital space 

Employers regularly ask me how we are creating a user journey that leads to better outcomes for our users. In my view, facilitating user actions with alternative technology is essential. For example, instead of having a chatbot function on your platform, why not have a digital human avatar that will provide users with a digitally humanised and comprehensive experience?

3. Diversify yourself from the status quo

Users today demand customisation and expect a tailored experience to satisfy their everyday needs. You need to know what they’re missing before they do. Technology is the only way to drive innovation in a space that calls for optimised operational capabilities and the infrastructure to maintain a successful digital strategy. 

To conclude – watch this space. Over the next few years, traditional legacy systems that fail to adapt will make way for the digital space of tomorrow.

About Smart

Smart is a global savings and investments technology platform provider. Co-founded in 2014 by Andrew Evans, Group CEO, and Will Wynne, Group MD, it is one of the UK's largest providers of workplace pensions. Its award-winning master trust, Smart Pension, is overseen by independent professional trustees.

In 2020 Smart Pension was named Master Trust Offering of the Year at the Pension Age Awards. Other awards include DC Master Trust of the Year, DC Innovation of the Year and Retirement Innovation of the Year in the 2019 UK Pensions Awards. Smart Pension was also named European Pension Fund of the Year 2019 in the European Pension Awards.

Legal & General Investment Management (LGIM), J.P. Morgan, Link Group, Natixis Investment Managers, Barclays, Chrysalis Investments and DWS Group are all investors in Smart.

We tweet as @SmartPensionUK.

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