Retirement, and all that it involves, needs a paradigm shift. Plain and simple. And this needs to address and bring together the three pillars of a person’s retirement. It may sound slightly grandiose and somewhat dramatic to start an article with such a statement but on balance, it isn’t. To justify this statement it’d be easy to dive straight into COVID-19 as being the trigger for the shift, however the reasons go beyond this.

For many people across the world the retirement experience just isn’t working for them. In the lead up to and during retirement, there are many things to think about and decide. It is also true that many are left to fend for themselves, with only 10 per cent of Australian’s taking financial advice. This is all hampered by a complex myriad of rules and often an opaque view of their assets (be it the Age Pension, superannuation or other savings). Simply put, many people’s experience of retirement is not the retirement they deserve.

There is ever-growing urgency for this paradigm shift when you consider the relentless global growth in defined contribution (DC) assets. The US, with an incredible USD$20 trillion in total DC assets leads the way and of these the vast majority is held by people aged 50+. Australia, of course, is the second largest DC market globally and there is approximately AUD$1.5 trillion in the superannuation accounts of those aged 55+.

Our role, as an industry, is to empower members to take control of and optimise their retirement experience. With systems that support saving and provide a firm foundation for members to achieve a healthy retirement; we need to do more to ensure that they don’t fall at the final hurdle.

Delivering the paradigm shift

A cornerstone for this change is meeting the needs and expectations of members, through the design and delivery of truly digital services. This has been a global theme much discussed over the years and is now in sharp focus due to recent events (enter stage left COVID-19). The key adverb here is ‘truly’ as this has deep and lasting implications for the retirement experience at many levels.

If you take the three pillars, the modern retiree faces a mountain to climb. But a truly digital, member first service can assist in this complex navigation, making the retirement experience more relevant, personal – akin to a banking app or an ecommerce experience.

Visibility across an individual’s finances would be a good place to start. How can they see what they have without spending endless hours on the phone and the web joining the dots? All assets across the three pillars (Age Pension + superannuation + voluntary savings) must be visible through their preferred channel, be it a laptop or smartphone. A truly digital service will do this and also exploit structural innovations such as Consumer Data Rights (CDR) in Australia or the Revised Payment Services Directive (PSD2) in Europe to bring new and exciting ways of helping enrich members’ retirement experience.

The truly digital service also empowers members to take action, whether that’s on their own, with guidance, or with the help of an adviser. Through modern technology and design, onerous processes are removed to enable people to put their assets to good use making them work harder across the pillars. A decision made to allocate part of their super to a particular bucket, say saving for one-off purchases, should automatically configure so that it does not hamper or affect their Age Pension entitlement, leading to automatically calculated optimised outcomes. And the ‘helping them’ point here is purposeful. This guidance and advice spectrum is, in real life, a broad and personal experience. For some, they follow a trusted friend’s advice and for others they may sit together, perhaps with their accountant, to make decisions. And for some, formal advice will be a good choice. A truly digital service allows for all scenarios.

Greater ownership and control over their finances across the pillars will lead to increased confidence, understanding and, importantly, a greater sense of accountability over their retirement experience. An experience that is meaningful and enjoyable for the individual.

COVID-19 as a case study for design

COVID-19 provides an excellent case study of why it is imperative to put humans at the centre of design. Acutely listening, understanding, and adjusting design to meet the exacting requirements of a broad church of people is fundamental. The same must be applied to deliver a truly digital service and positive retirement experience. Smart Pension places such significance on human centred design that our in-house user-research capabilities drive relentless design improvements and the head of the function reports to the co-founder and managing director. Understanding how people prefer to interact and use their assets across the pillars will ensure the service is exceptional.

But human centred design and the highly innovative and game-changing cultural way of thinking isn’t something you just wake up and decide to do. It must be in your DNA as an organisation. This means, in a time of crisis, retirees (from Yorkshire to the Northern Territory) are able to make informed retirement decisions, in real-time, from the comfort of their sofa.

And this has a huge spill over benefit in terms of organisational resilience. A modern, truly digital service that is based on a modern cloud-based technology with automation, AI and frictionless (and paperless) processes can readily stand up to the test posed by the likes of COVID-19.

How can we implement an easier retirement solution?

Execution is the tricky part. It is easy to talk a good game and Smart ‘s answer to this question is Smart Retire. Rolling out in the UK, it enables members to see, understand and take decisions in their retirement. The Link Group and Smart are working together to deliver the Australian equivalent of this simplified retirement experience; combining Smart’s fintech capabilities, using its proprietary cloud-based technology and user-centric design, and Link’s leading global and scaled administrative capabilities. As with changing needs of retirees, the technology never stands still; continuously deploying new features and improvements to enhance the retirement experience. It is ‘truly’ exciting that there will be a positive impact on millions of people’s retirement experience right across Australia.