Digital services are needed - and developed privately

Read the full SvD article in Swedish here. 

In response to comments on his article ‘Ordinary wage earners will not receive a decent pension’ in Svenska Dagbladet (SvD), Magnus Eriksson, PA Consulting expert in digital and regulatory says the Pension Authority should do more to facilitate the management of pensioners’ capital.

Sten Eriksson writes that a longer working life results in a higher pension which is absolutely correct. However, this is based on the fact that the pensioners must be able to work for a long time to obtain a decent pension. A long working life with a decent salary does not contradict my argument about the importance of managing pension capital correctly. On the contrary, the effect is even greater if the retiree can do both. The advantage of the proposal that the Pension Authority should do more to facilitate the management of capital is that it would mean less efforts on behalf of the pensioners.

Sten Eriksson is of the opinion that pensioners do not invest time necessary due to their belief that it will not pay off. That's exactly my point. Today it is extremely difficult for a regular retiree to understand how the different choices affect their capital and what they can do for their retirement savings. This is where the digital services come into the picture helping the retiree to get a better view of his pension with relatively small effort.

A parallel can be drawn to how banks previously focused on capital advice and management services for customers with a lot of capital. The services have been proficient and resource-intensive and therefore profitable only for this customer segment. With today's technology, we see digital services emerging that allow banks to serve significantly more customers in lower segments.

The industry is currently undergoing a transition from product to service focus as customers demand it and the banks' product margins decrease. Services that they proposed are therefore right in time. The Pension Authority are in a unique position to offer access to pension information via digital services, for example, giving the pensioner a better picture of their total pension size, fees and the ability to easily switch supplier and funds.

We see change is already afoot.  In recent days I have met several people with similar ideas, including some who have already begun to develop the corresponding services. It is therefore highly likely that these services will be offered through the private sector, which is good when services and support are needed. The Pension Authority can choose to rely on these companies' services or do it themselves. Either way, pensioners will be the ultimate beneficiaries of this shift towards more customer-driven services.