As a bit of a pension geek myself, it was great to sit down with Jonathan and understand how and why PensionBee are doing what they do. My key takeaway from this chat was that it's not always about offering a game-changing app experience. Don't get me wrong – PensionBee's app is really nice, but the efficiency gains and learnings that the team are making on a weekly basis by immersing themselves so deeply in the pensions landscape, finding new ways to do things, and offering value to their customers through content, is a truly effective way to drive change in the industry. They also offered me a mince pie, and it was delicious.
Can you describe PensionBee in ten words or less?
Can I have ‘the’ for free? The UK’s most loved pension company. Five words!
What’s wrong with the pension process today?
Or maybe what’s wrong with the pension industry. The pension industry do not have a very good history of working successfully with consumers. The products and the customer experience that trickles down to you and me are very poor by the standards of the modern fintech products that are setting a new bar for what to expect from financial services. Pension companies are 250 years old and they’ve been providing pensions, usually through employers, for a very long time. In a way, the internet and the idea of services available on your mobile phone passed them by, but they are slowly starting to put things in place. However, they don’t have a consumer mindset.
Their attitude ultimately means people are disengaged with their pension – maybe it’s the jargon, the perception that it’s complicated, the fragmentation of having lots of pension pots, or, really crappy customer service that causes you to have to fax things in, go to the post office and wait in call centre queues. You end up with consumers that aren’t really interested in taking control of their long-term savings. When consumers do not take control and exercise choice, they’re getting a poor deal and they’re suffering because the products and services aren’t as good as they could be, the price is too high, or they can’t move around to services that would better suit them.
Wrangling old pensions together is an arduous process with a lot of paperwork and waiting around. With PensionBee offering this as a service, what do you do to cut down on resource-hogging tasks and drawn-out processes. Is there an element of AI or automation?
PensionBee started from the position of any other consumer trying to take control of their pension situation. We had to learn the landscape of pension transfers; what’s it like to move money from your pension providers? We have built up an extraordinary amount of knowledge about moving money out of existing pension providers, the right questions to ask to the right people in the right way, the right types of documentation, the information you need from customers to unlock those doors and get that money moving.
So there is a knowledge component where it’s almost like the larger the dataset, the more likely you are to be able to service a new customer. It’s not big data in the sense that you’ve got billions of data points, but we do have a big dataset with which we can map employers that had certain pension providers at certain times, to the contact details of the right people to speak to, along with the ability to generate documentation with the right information on it. So we’ve really streamlined what is essentially a manual process to the point where it’s a click-button thing. It’s automated for most of the pension transfers that we need to go through.
On the other side of it is the challenge around the digitisation of pension transfers. That's something that consumers have no access to whatsoever. So if you, Ben, want to take money out of your pension provider, you have to go through the front door and use a paper transfer form. Fortunately, the industry has what I like to think of as a club—a digital transfer club—and if you’re in it you can make requests to move money between Pension A and Pension B (hah – PensionBee). We were able to join that club and we now make 70% of our pension transfers digitally. That’s a massive win – taking a process that’s slow and fraught with pain, and making it into something that feels more like a 21st century experience. Once something’s in the realm of being digital, you can automate it. We’ve thrown all the automation we can manage at that part of the process in order to make sure that if there is a pension that comes in and it can be transferred digitally, we could opt to have a zero touch experience from our point of view. As it happens, we don’t do that. We like to inject a bit of customer hand-holding into the process just to make sure people are happy.
At this point, Jonathan points to a rather brutalist and cumbersome machine made of textured grey plastic. Many trays and feeders stick out of it in multiple directions. Next to it, an appropriately-sized sack of good old-fashioned mail.
In terms of AI, I want to talk about that machine over there, which is called the Millennium Falcon. It’s a very large, high-speed scanner plugged into some OCR software. That takes the gargantuan amount of post we get—over 200 pieces a day—and scans it. The machine reading component looks for name, date of birth, NI number, policy number, and it will match you in our customer database and extract any relevant information like ‘Is this a successful request for information about Ben’s pension, or is it a letter telling us to bugger off and go and get his passport details.’ So that’s massively cut down on what you can imagine was an incredibly painful, soul-destroying process.
I think if you went through the doors of some of the larger pension providers there probably is a big pool of people dealing with a case queue without someone questioning, ‘what would be a useful way of streamlining this process?’ And to be fair, what would be their incentive to do so?
What are the challenges when it comes to getting people engaged with their pension?
Our biggest competitor is inertia – of having your money sitting somewhere and not doing anything. That is a big problem, because people don’t routinely talk about pensions the way they do about mortgages or house prices. We’d love to make pensions as engaging as that. And it can be. It’s long-term savings and it’s a powerful part of anybody’s financial picture. After your house, it’s your biggest financial asset. Our challenge is getting people switched on to their pensions. We have this concept of ‘the right moment in time’. So you might be thinking about your finances on a Sunday morning, because you’re getting married, taking out a loan, or buying a house. That’s prompting you to see what you’ve got and see that everything’s in order, and you’re going to think about the pension savings from previous jobs. You may think, “I don’t know what I’ve got there” or, “It’s probably not relevant for 20 years anyway”. But of course it is, because if you’re not taking control of it, how are you going to be sure that you're saving the right amount? Or maybe you are saving too much. It’s difficult to get a good picture of something when it’s split up all over the place, and the small amount of effort you’re willing to put in to finding out what you’ve got is wasted sitting in a call centre queue or filling out a form. We want to make it as easy as possible for people to take control when they’re in that moment of enthusiasm.
We’re very content driven and we write a lot about personal finance – things that are related to those moments in time, like, “10 ideas for organising a beautiful wedding on a budget”. So they are related tangentially to personal finance or long-term savings. Sometimes we just won’t even mention anything about pensions, but we’ll tie it back to “have you thought about your long-term savings?” It’s awareness first and product fit later.
Can you tell us about your tech stack and how it helps PensionBee do what you do?
The system that we use every day is the Salesforce platform, and that’s the golden source of truth for our customer data. Everything that the Customer Success team do, whether moving customers into PensionBee or helping them with their contributions, is all managed within Salesforce. That provides an environment where you can add things like custom data objects, validation rules, business process automation, if-this-then-that-type processes. We are constantly modeling out our data in many ways and Salesforce supports that and has the flexibility to capture the nuance of what we are trying to do. And we can tie it all together and streamline it so people are clicking as few buttons as possible.
The customer-facing product is entirely built on Heroku, an application runtime platform also owned by Salesforce. Most of the app is built in Javascript/Node.js. We use native Javascript but with a framework called Ractive (originally developed at The Guardian), which is a little bit niche but really fits our needs well and it’s quite lightweight. The tech stack on the Heroku side is really straightforward and is familiar to anyone coming in to it from a web development background.
What connects the two worlds is a product called Heroku Connect. It’s a synchronisation system where Salesforce behaves as the master and they sync their datastores together. It’s great if you’re on the web development side as you can use all the tools and processes that you’re used to as a web developer, and you build the best product that you can in the most agile way that you can. From the business side, all the data that’s being manipulated by the customers in the web app and the mobile app, that’s all coming back into Salesforce and into the environment that the operations team are controlling or BeeKeepers (account managers) are working on. So it’s a really nice separation with a loose coupling in between. One of the things that it’s allowed us to do is create what I think of as a hybrid technical/non-technical team on the operations side. So they are working with those technical concepts of data modeling, validation, and logic that we spoke about before. But they're not software developers. So they’re able to do things that would previously have the software developers bottlenecked. An example being whenever you need a new report, new validation rule or new custom field on an object. A business with a custom CRM would have to go back to the development team. That’s really powerful as you unlock a lot more capability with the people who are really close to the product.
How has it been integrating your service with that of Legal & General, BlackRock and State Street, with them being “older” players in the industry?
Let me answer that from a tech and a brand perspective.
From a tech perspective the answer is that it is fairly traditional. They’re offering a simple interface into an investment product and there’s a low barrier to having a relationship with that asset manager, as we can trade using email. There are things that we are looking at to integrate with some fairly intimidating banking APIs to achieve things like straight-through processing for investment orders and responses. That’s not really a source of problems because we buy and sell once a day in bulk and then it’s up to us to manage the segregation of the investment units throughout the customer base.
On the brand side, your comment about them is more pertinent because we want something that feels like it carries through the branding which we have struggled hard to create with PensionBee. On the website we’ve surfaced those brands because they’re solid and trusted. But we also want them to be a little bit sparky and new so that they can fit with PensionBee. We get them into the PensionBee studio once a quarter to record a video update and illustrate the video with some animation to bring what they are saying to life. That’s been very successful. And of course there are three different asset managers on the PensionBee platform, so they do have a reason to look really good, because effectively they’re in competition with each other. It’s been really cool that they’ve committed to doing that with us right from the beginning and put their best foot forward. They’ve really got behind us in what we want to do in the pro-consumer side of pensions and they’re happy to give us the time and work with us to present products that make sense to ordinary people. That’s been really positive. They’re all consumers at the end of the day to, so they can feel the value in what we are trying to do.
Keep an eye open for Tech Tales №3! We'll be chatting to the CTO and co-founder of a company looking to make life insurance exciting through wellbeing and gamification.
Looking for a previous Tech Tales?
Tech Tales №1: Megan Caywood, Chief Platform Officer, Starling Bank
