Like most large pension providers Scottish Widows is enjoying stellar growth, with auto-enrolment helping boost its assets under management from £32 billion to £92 billion in recent years.
But Scottish Widows workplace pensions director Graeme Bold says he sees this very much as a “starting point”. Bold says he’s intent on laying the foundations that will help the business expand, potentially running up to £150 billion of assets in future, to ensure it remains a major presence in a workplace pensions market that is expected to be worth £1 trillion by the end of the decade.
Bold is clear that one of the key elements of these foundations is better member engagement — which is likely to involve digital innovation, more consumer-centric communications and even ensuring the iconic Scottish Widows figure pops up regularly on TikTok.
“It sounds crazy to say we’re just getting started when you’re at £92 billion of assets,” he says. “But my ambition would be that we play a much bigger role in supporting people in thinking about how they manage their life in retirement going forward.”
Better engagement can help grow the business he says, but it will also delivers far better outcomes for customers.
“Enhancing engagement definitely improves retirement decision-making,” Bold reflects. “When we start with our customer research, there are three questions I always come back to from customers. One is, ‘what is my pension?’ The second is, ‘what might I need in the future?’ And the third is, ‘what should I do?’”
Many pension providers are trying to encourage better engagement with pension savings. What does Bold see as the key challenges? He emphasises the importance of establishing savings habits early, and engaging younger workers with pensions to address the problem of low uptake rates and lower contribution levels. Here he says technology can help. Alongside webinars and face-to-face interactions, he says that Scottish Widows has also been involved in more unconventional approaches on social platforms like TikTok to boost engagement levels among these younger cohorts.
He also mentions how the firm is integrating products across Scottish Widows and Lloyds Banking Group to benefit customers, exemplified by the recent Money Hub connectivity within the app.
Other hi-tech initiatives, such as AI-generated games and interactive features, are also helping drive engagement. Bold cites the recent “pensions mirror’ as a prime example, which generated a picture of what people might look like when they come to take their pension as a way of visualising their future selves. This he says was an excellent engagement tool, used by over 300,000 people.
Bold began his career in the pension industry at Standard Life, where he initially joined as an actuary. From a position that was largely concerned with data and figures, his professional journey took him to more consumer-centric roles, initially working in customer operations, where he says he gained valuable insights into aligning pension propositions with customer needs. He has also found himself working at the forefront of transformative projects, like the Retail Distribution Review (RDR).
Bold says: “Throughout my career, I’ve found myself drawn to challenges that push me out of my comfort zone. I quite enjoyed that pressure, and the pressure of delivering something or taking something to the market. The kind of energy that comes with that is really interesting to me.
“It’s about the thrill of meeting deadlines, of ensuring that what we promised is delivered, and seeing how it impacts the market. It’s a challenge that keeps me engaged and motivated in my work, whether it is navigating regulatory changes or rolling out new propositions.”
Strategic initiatives
More recently at Scottish Widows, Bold has spearheaded a number of significant initiatives. These include leading the migration of the business onto new systems, a process that involved transitioning around 1.3 million customers with around £23-27 billion in assets.
He says this strategic move provides a foundational platform for future growth. Concurrently, the rollout of digital services, including the recent integration of the Money Hub functionality into the app, signifies a pivotal step towards enhancing customer experiences and scaling the business in the digital realm.
Brand Recognition
Bold acknowledges that Scottish Widows is one of the few pension providers with a recognisable brand, with many people familiar with the iconic woman in the cloak. He says this gives the firm a major advantage when interacting with employers, advisers and ultimately pension savers. He says the company is looking to leverage both technological advancements and brand recognition to develop enhanced customer engagement and business growth.
He says: “It sets us apart. If we’re working with an employer or an adviser and that employer is saying I’m giving you a new pension or I’m changing the pension and they explained that it is powered by Scottish Widows, then the chances are the employee knows who Scottish Widows is. That helps them connect.
“But I think the brand itself will evolve as we go forward and needs to evolve. That is something that we’re looking at.”
Digital
Bold emphasises the power of driving engagement through digital platforms like the Scottish Widows app and Lloyds Banking app, where users can interact with their pensions more frequently. These have now largely replaced traditional annual statements he says.
He says these platforms allow individuals to view finances from different providers, including savings and bank accounts, in one place, offering a more comprehensive view of an individual’s current financial situation. This goes further than just viewing different accounts and ‘pots’. Bold says that these platforms pave the way for greater consolidation.
Consolidation not only streamlines financial management, but also encourages customers to take a more proactive interest in their pension savings, he says, leading to better informed and more strategic decisions, particularly around retirement.
According to Bold, this digital journey has resulted in people consolidating around £4 billion from individual accounts since its launch in 2017. He says the next decade presents a unique opportunity for pension providers, fuelled by increased savings in DC pensions, the regulatory drive towards greater market consolidation and the transformative potential of digital platforms and AI. It is a big opportunity that Bold does not want Scottish Widows to miss.
He says: “As people get to know what they’ve got, where are they going to go? They’re going to ask, ‘how much will it be worth?’ And ‘what do I need to do?’And that for me is the big opportunity for Scottish Widows.”
Future growth
The pensions industry isn’t the only sector looking to transform itself over the next decade. This change comes against the wider backdrop of the transition towards a lower carbon economy. It is not surprising that Bold points out that Scottish Widows is also centring environmental, social and governance issues within its business operations, with a particularly focus on environmentally-friendly investments that benefit members financially. Last year, it had around £23.7 billion invested in carbon-conscious strategies.
Bold says Scottish Widows is also keen to ensure that diversity, equality and inclusion (DEI) is embedded in its strategy and operations. This is certainly a crucial part of its thinking as it looks to broaden the range of services it offers, includng launching new digital tools specifically for employers.
Bold says Scottish Widows prioritises inclusivity in the design of all of its digital services to ensure accessibility for consumers with a range of needs. To deliver this Bold says the company tests its services on a wide range of users in order to guarantee that everyone can understand and use them. This involves catering to diverse needs, such as vision impairments or dexterity issues, from the outset of design.
Additionally, the organisation aims to encourage pension saving among a variety of demographics through promotional activities that highlight women in retirement and investigate differences in engagement across various ethnic groups.
As elections loom, Bold says the ongoing policy agenda to promote savings, implement financial dashboards, and provide support for retirement and guidance is “well-set”. A change of goverment may be coming but Bold says that regardless of election outcomes he anticipates continuity in regulatory direction.
Whatever the underlying political weather, Bold says that Scottish Widows will focus on its core aims: increasing client engagement, focusing on innovation in investment solutions and enhancing its whole offering in the years ahead. This he says will help drive growth forward in the business and ensure members are better served in terms of both product and service.
Bold says: “We’ve been building the infrastructure to get a single platform in place. If you think about where we’re going in the future, this market is due to double from £500 billion to £1 trillion by the end of the decade.
“We’ve been building the foundations to grow this business rapidly. We are investing heavily for, £120, £140, £150 billion of assets and putting that investment in the platform and into our digital services, so that we can continue to grow.
“It might sound crazy to say that we’re just getting started, given our size and our history, but my ambition is that we will play an even greater role in future when it comes to supporting our customers and helping them manage their retirement savings.”