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BLOG. 3 min read

How Data and Discipline can Drive the Future of Retirement Savings

Continuous improvement is a concept that has taken hold in many manufacturing and service-oriented industries. It involves regularly measuring and then adapting processes in order to realize either incremental or breakthrough improvements.

As part of a needed push to increase participant savings, the retirement industry would benefit from accelerating a similar disciplined continuous improvement approach. Using data to better engage participants—to understand what influences them, how they respond to certain prompts and messages, which types of communication are most effective, and when they are most likely to make changes—and then adapting communications and savings tools is a critical step towards driving better outcomes.

It All Depends on Data

Thanks to digital tools and data-driven insights, there are many ways to help participants increase their savings rates. Analysis into how participants respond along with what they respond to and even when they respond can become defining elements of a more effective retirement offering. Let’s examine a few ways in which that analysis can be used.

  • Monitor Plan Success: Historically, a plan’s quality was measured by how many investment options were provided instead of tracking how many employees were ready for retirement. The newest plan health dashboards offer a more granular readiness assessment. They measure employee contribution rates, but also highlight gaps or opportunities to connect with participants. Robust health metrics point to effective features and plan improvements. Data can be compared to plans of similar size and market segments, offering insights into how the plan is faring versus competitor plans.
  • Customize Content and Delivery: Because everyone’s financial journey is different, retirement guidance needs to be personalized and supportive. Use of gamification is one effective way to customize content and draw participants in—and then keep them involved. For example, data shows that using points or a reward system is a powerful incentive to having participants engage beyond an initial review. SS&C has found that when including gamification, participants visit more pages, spend more time on a site, and increase their savings. In many cases, results are 100-200% higher when including games and incentives. Gaming keeps participants connected and aware, prompting them to continually monitor their savings progress.
  • Understand What is Compelling: Keeping materials fresh is important, but equally essential is keeping materials relevant to the participant. Knowing what guidance a participant wants/needs and then making more of that information available generally leads to confidence and action. Data can help define which materials are popular, allowing for similar materials to be created and delivered in the future. Incorporating emails or banners to advise participants of new materials keeps them aware.
  • Make it Personal: The current suite of available planning technologies delivers supportive, sophisticated yet easy-to-use situational models to diagnose, analyze and promote individual retirement planning campaigns. Data can predict behaviors and then be used to influence positive outcomes or to counter less productive behaviors. Data can also help define targeted calls-to-action—using multi-channel approaches such as email campaigns, specific consent requests, animated videos, gamification and direct mail to suggest next steps or deliver articles of interest. Including prompts while a participant is logged into a plan website results in more immediate action. Use of any or all of these can be measured down to the participant level so they can be refined and continually improved.
  • Know What They’re Looking For: Helping participants find the information they need makes retirement an easier and more manageable process. Centralized self-service platforms with materials such as enrollment kits, guidelines, investment options and general communications can simplify the experience. Data on what information is frequently sought allows those materials to be made more readily visible or accessible. And, by tracking when participants need help, providers have the ability to enhance guidance and planning resources. Using intelligence gathered from such “smart” hubs has been shown to boost participation rates by more than 85%.

The Future of Retirement Savings

The use of digital tools and technologies as part of a continuous improvement approach to refine all aspects of retirement planning and saving has never been more possible. With the wide range of data now available and the ability to customize approaches to each individual, stakeholders have a valuable opportunity to enhance their offerings and participant savings rates. In-depth data analysis leads to better plans, improved savings, stronger asset growth and more engaged employees. It’s a win for everyone in the retirement lifecycle.

You can explore these ideas in more detail in our "Data to Drive Participant Outcomes: Five Must Have Digital Capabilities" whitepaper. Or listen to our panel of industry experts in our "Using Data to Drive Participant Outcomes" webinar.

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