Disrupting Pension in MENA with FinTech
Pension and wealth management are not on the top of the list for many twenty or thirtysomethings. And who could blame them? It seems like ages before retirement hits and who has the time to go through confusing term sheets in the meantime? So we just sit, wait and growl when the retirement age gets raised again like in the Netherlands.
Lack of transparency and autonomy of personal pension and wealth management is a big problem all around the world. Even more so in the Middle East and North Africa.
As CEO of Surance, an Amsterdam-based FinTech startup, I was invited to share insights with the audience of the 2017 MENA Pensions Conference in Bahrein on November 28th.
Surance wants to make wealth and pension planning easy, honest and accessible for everyone. Access and change your investments anytime anywhere. We’ll even notify you when you’re off track. We’re a Rockstart Accelerator alumni and part of ING’s Innovation Studio.
Here are some of the lessons of the panel discussion about pension technology and disruptive FinTech models.
The discussion was moderated by Ms. Mirna Sleiman, Founder of Fintech Galaxy, Dubai. The other speakers included Mr. William Byerly, Executive Vice President & General Manager, USA-based Omni at FIS, and Mr. Thomas Krogh Jensen, CEO of Copenhagen FinTech in Denmark.
1. Tackling challenging pension models in MENA
Nearly all pensions in North Africa and the Middle East are run by their respective government and all of them have run into the problem of sustainability. Just like in the Netherlands people becoming much older and the ratio working versus retired people is skewing rapidly towards less working persons for every retired person.
For instance, the pensions in Bahrein follow a model whereby 7% of salary goes to pension. After 15 years, employees can retire for a relatively small pension and after 20 years for a large pension. This brings substantial distress to the system when 45-year olds can retire after with a large pension after 20 years of employment.
2. Technology is enabler and not a goal in itself
Successful technology companies have made the lives of their customers easier by focussing how they could to do their tasks simpler and better. Throwing more technology at a complex system doesn’t solve the problem for end-customers. It is still complex and no fun.
3. Work will take on different forms and is likely to radically change in the next 10 years
The relevant question here is: will employment with pension as an employment benefit, be the dominant form of working in the future? Often pension is being offered as an employment benefit, but what is work going to look like in the future? How are employer-employee relationships changing?
As a company, you want to support your customers cope with this changing reality and offer meaningful interaction, information, and choices.
4. Making the end-customer central
Design and innovation can help customers with the challenges they face. The way to do that is redesigning your product from the ground up.
Listen to customers and trust they will make appropriate choices when you give them meaningful choices and relevant information. For instance, make saving mandatory, but leave it to customers to select their preferred supplier or solution.
Surance remains dedicated to collaborating with interest groups and governments in building sustainable innovative pension models for the future.
We thank the organisers Takaud Savings and Pensions B.S.C and Mr. Ebrahim K. Ebrahim, and interesting partners and participants including The Economic Development Board of Bahrain, National Bank of Bahrain, Ms. Mirna Sleiman, Mr. William Byerly and Mr. Thomas Krogh Jensen.