In his 2009 book The Nature of Technology, the noted economist W Brian Arthur defines technology as “a means to fulfil a human purpose”, writes Yolisa Skwintshi, Head of IT, Eskom Pension and Provident Fund. It’s a broad definition, certainly, and one of many for “technology”, a term that only really took root in the mid-20th century. But in the context of pension fund administration, it’s spot on.
Fundamentally, pension funds are not about financial investments and returns. They’re not even about incomes and futures. They’re about people: the ones who contribute (and their employers), the ones who invest and manage, and the ones who draw a pension.
Technology plays an important role in how a pension fund interacts with each of these stakeholder groups, which all have different needs. Employers need to know how their contributions are being invested; members need to see how their investments are growing; and pensioners need to be able to access their funds.
What is key is harnessing technology to enhance transparent, convenient and clear communications with stakeholders. And what was acceptable yesterday – for example, snail-mail letters – won’t be today, when we use email and newsletters instead.
But even emailers are becoming somewhat outdated, considering the social platforms available that allow us to communicate almost instantly both with mass audiences and, more directly, with individuals. Not only that, they permit the kind of real-time, two-way communication that in the past has only been possible using a call centre, which is costly to operate and invariably isn’t available 24/7.
WhatsApp is a great example. It’s not only a social media platform that connects friends and communities, but also a powerful business tool that can enable an organisation such as the Eskom Pension and Provident Fund, where I work, to push information to its membership, contact individual members and manage queries.
It’s quick and efficient (there’s no waiting for a letter to be delivered or an email inbox to be checked), and, importantly, it’s highly cost-effective. This is why we’re currently working on a strategy to bring WhatsApp – which is widely used, including by our increasingly tech-savvy pensioners – into our stakeholder communications mix.
Information management and automation
But technology certainly promises a pension fund advantages other than communication, not least in terms of internal processes and information management.
We’re harnessing technology to automate and speed up functions such as data analytics and reporting, payments, on-boarding of members and connecting with payroll systems. We’re also looking at providing an online dashboard for members, where they can monitor their investments themselves anytime, instead of having to interact with someone at the fund during office hours.
Cybersecurity, naturally, must also play a vital role in everything we do. If nothing else, the current Covid-19 lockdown and the move to working from home have underlined the necessity of strong digital security; we have already had to contend with a few cyber incidents, fortunately successfully.
Ultimately, harnessing new technologies allows us to enhance what we do, but the question must always be asked: how will it benefit us, the employer (in our case, Eskom) and our members? Effective technological advancement must always go hand in hand with specific benefits such as time savings, greater convenience, better communication, improved efficiency and cost savings.
So, what does the future of technology at our pension fund look like?
We recently instituted a new IT system, for which we have ambitious plans: we will make better use of automation, particularly in the claims environment; we are planning a mobile app, for better stakeholder interaction and self-service; we’re developing more intelligent data analytics and reporting; and we’re working on enhancing services to the employer and our membership through portals dedicated to them.
But what’s really exciting to contemplate is what is yet to come in how our organisation uses technology to do what it does best: creating wealth, and a sustainable future, for our members.
AI and robo-advisors
Artificial intelligence and robo-advisers will increasingly become indispensable tools for executing our investment strategy to best effect, and allow our investment managers to work more smartly and quickly.
For an organisation such as ours, which is focused on responsible investing (because our members should have a good enough world into which to retire), better use of data analysis and business intelligence in driving our investment decisions is a wonderful prospect. With billions of rands in assets under management, we have an opportunity to make a significant impact with our investment decisions – and technology can only enhance such decisions.
Inevitably, the adoption of such technologies will necessitate changes to our business model and our processes; it’s a bit like how transitioning from the fax to email transformed how businesses operated. But this will ultimately lead to a more cost-efficient, better-managed fund, and greater financial returns and retirement security for our members.
In other words, our ability to better fulfil our particular human purpose – to grow our members’ investments, so that they have a brighter future to look forward to – rides on how we adopt and apply new technology. As an IT professional, I can hardly wait for what lies ahead.