The Financial Conduct Authority (FCA) reported recently that of the 15.6 million adults in the UK with investible assets of £10,000 or more, 8.6m are more than 75% invested in cash. Their target is to move 20% of these out of cash and into growth orientated investments by 2025.

At the same time they reported only 8% of UK adults received financial advice in the last 12 months. Given the cost of advice relative to the scale of most peoples’ financial assets this isn’t a surprise.

But it means millions of people are left to make important financial decisions all the time without access to professional support.

This is where digital savings journeys can help deliver much better outcomes to UK savers, and represents a big opportunity for those that can take the right products to market.

What makes a successful product?

1. User experience, especially when first using a new savings product needs to be top class. Mobile phone technology like facial recognition, combined with advances in online AML checks and instant direct debit set up, have transformed customer onboarding processes. There are no excuses now for not having a stellar digital user experience for customers.
2. But it’s only really possible to deliver that UX well, if you have a clear purpose and simple product. If I think of examples in the industry of what hasn’t worked well or reached scale, they often share the same characteristic of trying to cater to too many different customer needs.  Contrast that with say, a pension consolidation product targeted at a certain demographic with a very specific purpose, and you see much more success at customer and asset acquisition.    
3. Finally, you are nothing without good distribution. People need to find it easily. Customers need to be “sticky” with asset flows continuing for the long term. Business behind it needs to be successful, otherwise it will fail or be bought by someone who does have these characteristics.

Future development

There are a number of things on the horizon which will make this area even better:

• Digital tools can learn with us. So, by taking customers through a digital journey, providers can then continue to build a really good picture of how customers are going through the decision making process. So you can get data on the most used sections, or the bits that people struggle with the most… as well as how different customer demographics engage differently. This all means that he more we employ these tools, the more we can use the data science part to improve the journey.
• Open finance is another extension of this – the ability to bring in data that already exists can offer even more insight. And the full capabilities here are only just on the horizon, the more we can open up data from bank accounts, other financial products and in a safely controlled environment, the more we can tailor the journey and make it even easier.
• ESG investment disclosure. Investors should be able to make informed decisions on every investment out there, presented in a clear and consistent way. Recent Government green paper is addressing that with massive change to come.

Looking at how far the industry has come, today someone could jump on the bus home from work in a remote part of the country, and within a few seconds, access via their phone some of the best investment insights available and start saving with a clear plan for retirement.

Digital is democratising access to this expertise and radically reducing costs. And we’ve only just begun.

For Insurance and Reinsurance professionals only.