The rise of Generative-AI has catapulted artificial intelligence into the mainstream, with the likes of Chat-GPT filling countless column inches since it was launched.
However, AI is already having a significant impact in many industries – and pensions could soon be next.
Indeed, a recent survey from Professional Pensions revealed that some 77% of respondents believe AI is set to revolutionise the pensions industry.
In the UK, members saving into Smart Pension or Aviva schemes can already use an Alexa-enabled tool to track their pension contributions by simply asking the smart assistant how much their pension is worth and what they are paying into it.
Members of a Smart Pension scheme are even able to make changes to their contributions directly through Alexa, streamlining the process for the customer and reducing operating expenses at the same time.
Lack of engagement with pensions
One of the most important benefits of introducing AI into pension products could be in improving the customer experience and boosting member engagement.
This has been a long-term problem for the industry, with recent research released by the Pensions Dashboard Programme finding that 55% of adults aged 18 to 75 have had no engagement with their pensions over the past year.
The issue is that most member communications sent out by pension providers are poorly targeted, dissuading members from engaging with their plan and taking control of their pensions.
And the complexity of the pensions market, which is rife with industry jargon and complicated concepts, means these letters are often left unread and unacted upon.
This means that members are often unaware what to do when they hit specific life events, such as when approaching retirement or getting married.
This leads to members missing out on making important investment decisions that could otherwise maximise their income in retirement, meaning they are not getting the most out of their pension.
Making pension management simple
But by replacing these emails and letters with a highly targeted AI-powered messaging system, pension providers can ensure that members are kept abreast of relevant changes to their circumstances at the time they happen.
They can then make changes to their plans as required, ensuring that they are maximising their benefits in the most efficient manner.
Such communication tools also have the added benefit of driving down inbound calls as members are sent information directly, rather than being required to contact their provider.
This can help to drive down operating expenses and make plans more cost-effective, while simultaneously helping to deliver members with a more user-friendly experience.
Such obvious benefits make it easy to see why AI is getting ready to revolutionise the industry, creating a win-win situation for members and providers alike.
