At the Danish pension fund AP Pension, the digital strategy is closely linked to the customer experience. Efficient and agile IT systems and customer-facing solutions provide the most loyal and satisfied customers, says Jørgen Nygaard Nielsen, CIO of AP Pension. Among other things, he points to machine learning as a way of building closer costumer relationships.
Although digitalization and scaling of the existing systems and solutions sounds like “cost reduction and efficiency improvement” to some, at the pension fund AP Pension it is at least as much a matter of optimizing the customer experience. AP Pension manages more than DKK 160 billion in pension funds on behalf of more than 400,000 customers.
"When we look at the digital strategy, it is, in some sense, twofold. On one hand we have the purely technical and simple process and operational optimization with the savings you can get there, and then on the other hand there are the customer-facing efforts. In 2019, we launched AP Pension’s new digital strategy, with a strong focus on customer-facing things like self-service and counseling, as well as a focus on optimizing the processes that affect customers. Faster handling of cases, shorter response times and solutions that facilitate contact with AP Pension are of great importance to the customer’s experience – and ultimately, increased efficiency means a higher number of satisfied and loyal customers", says Jørgen Nygaard Nielsen, CIO of AP Pension.
IT and robots ensure manageable customer relationships
The idea of changing retirement fund, or financial institution in general, can, to a lot of people, seem like an almost insurmountable task, which is why AP Pension’s digital strategy is largely focused on facilitating the transition for customers.
"Moving to another pension fund is a big thing, so the better optimized our systems are for the task, the more smoothly the customer experiences it - and the easier their transition to become a satisfied AP customer will be", Nielsen says. He explains that AP Pension is also aware that partnerships with, for example, IT providers of various services and solutions are not necessarily something that the customer needs to relate to:
"Previously, we have had a tendency to develop everything from the ground up, but now we use more partnerships. We have a large number of partnerships that supply different elements for, among other things, front ends and innovative services, but it gives the customer a sense of security that they only have to deal with AP Pension. In the long term, the plan is for dedicated customer teams to structure data and feedback to define how our services will evolve".
The customer-facing focus does not confine itself to new customers. Nielsen explains that through machine learning and software robots, AP Pension attempts to guide customers to act in a timely manner.
"Machine learning and robots give us some opportunities that we did not have before. Among other things, we use algorithms to identify when events occur in customers’ lives that are important to their savings. So, for example, if you are approaching pension age or change your address the algorithm ensures that you are contacted, so that the pension savings can “count on it” in relation to the further savings. Sometimes customers forget to give consent, but our robots make sure to send a reminder. These are specific services that – hopefully – benefit the customer. At least that’s what the feedback points to."
Cloud compliance and bottlenecks
As a financial company, AP Pension is governed by strict rules of compliance set by the Danish Financial Supervisory Authority, among others. It especially sharpens up the requirements for the use of subcontractors, but also has a major impact on the company’s ability to act in the cloud.
"Compliance requirements are only positive, because we work with people’s futures. However, there are some sector-specific governance and compliance rules thatforce us to work extra fast and hard when it comes to using cloud solutions. Not because cloud is dangerous, but because we must manage the supply chain and ensure full transparency right down to the sub-supplier level. We spend more time on things like supplier contracts, security and outsourcing today than we did a few years ago", says Nielsen.
At the same time, it is important to find the right suppliers. For while many corporations pride themselves on their ability to deliver cloud integration and facilitate transitions to new systems, that expertise should sometimes be taken with a grain of salt.
"A lot of corporations claim that they can “cloud” – but when you look into it, few possess the overview that is required when working with a company like ours", says Nielsen.
"With our data warehouse, for example, it was easy to set up the environment, but moving data out afterwards was difficult. The bandwidth was fine, but there was a bottleneck at the network protocol level – various PTTP stacks that were in the way. In a situation like that, you have to master troubleshooting to the very bottom and it just requires a level of competence that few people have."
Jørgen Nygaard Nielsen’s best tips for the agile CIO
- You must challenge yourself and never let the organization stand still. A good example is the security area, where you need to test both
the 1st, 2nd and 3rd lines of the company’s defense, and where you need people from outside who know all the little tricks. These include both the simple things, like a USB key in the reception computer, and the more high-tech attacks.
- Consider every aspect of your cloud journey and be humble about what it really takes. Things take time and migrating to a cloud solution can be a daunting task, so there must be tight governance on the economy, and you need to make sure that the organization is prepared for the journey. Have proper control over expertise, both internally and with your partners, so that you succeed with the project and do not lose control.
- More than ever, CIOs in the financial sector must be in control of the supply chain! The organization must be in control of processes, data, systems and internal competences to such an extent that you can control and monitor your outsourcing tasks in detail and comply with the requirements of the supervisory authorities. It is the biggest management task in years, but it is our clients’ money that we manage, and we owe it to them to be in control of the process from start to finish.
Digital facts about AP Pension
- AP Pension has on numerus occasions introduced various types of machine-learning solutions and robots. An example of the robots in action occurs when significant events in customers’ lives require specific things from their pension schemes. If a customer is approaching pension age, changes address or marital status, then AP’s robots make contact and start a communication flow with the customer. The robots also ensure that automatic reminders are sent out when the client has had a meeting with one of AP’s advisors. In this way, the number of cases where the customer has to respond to emails, give AP different permissions or otherwise relate to documents, but for various reasons does not, is reduced.
- Through the Mobil AP app, customers can easily and comprehensively check up on the most important aspects of their retirement savings, such as payments, savings and returns, or how they (or their closest) are insured in the event of death, disability and critical illness.
- AP Pension has a strategy to seek a high degree of customer feedback regarding the company’s various digital solutions and their app. In the long term, this feedback must be processed by dedicated customer teams and any future solutions must be based on customer needs which is a strategy that demands more than just technological ability.