Until today, the digital tools offered by financial institutions to support French savers in the preparation of their retirement were essentially limited to the provision of simulators, in particular the one developed by Harvest, in addition to the official one: M@rel. In addition, unlike the US, Financial Planning’s offer (see Digibook article) – oriented towards retirement preparedness – is nearly non-existent in France.
With theimplementation of the Pacte law, and in particular the PER [1],and the pension reform, some players are positioning themselves by engaging inapartnership with start-ups to offer new digital pension support services.
The early adopters: Employee Savings Plan’s players
In 2017, Amundi was the first to offer the adaptation of a robo-advisor to its employee savings and retirement scheme. After 18 months of use, it has aroused the interest of more than 200,000 savers by offering them the possibility to carry out simulations of the distribution of their investments according to their profile and their project. 15% of them chose to activate the option to implement the proposed allocation with a single click and thus benefit from a simple execution service and personalized follow-up over time. This represents nearly €250m in AuM. With this service, the behavior of savers has also evolved: more active, they practice a more diversified allocation of their investments with an investment horizon often longer within their employee savings.
In the same year, Natixis also launched AMPLUS, a digital retirement preparation service. It enables employees of Natixis Interépargne client companies to inform themselves, develop and follow a personalized retirement savings strategy over time, adapted to their situation and their company’s retirement savings plan.
In less than two minutes, the employee can:
- simulate the amount of his future pension,
- determine his need for supplementary retirement income,
- tailor his savings effort to achieve his goal, optimizing his corporate savings.
The new partnerships
In October 2017, Natixis enhanced the capabilities of its digital retirement preparation offering with its partnership with Sapiendo-Retraite, a Fintech that has innovated in pay-as-you-go (PAYG) pension counselling.
Its founder’s idea was to provide a quick answer to the crucial questions: when can I retire, at what age? Are my pension statements accurate? How do I correct them? Do I have interest in buying back quarters? Can I work in retirement? What is the optimal time to assert my rights?
Indeed, the French spend on average 23 years in retirement; yet 70% of them do not know when they will leave or with what amount! In addition, a significant number of career records contain anomalies that may affect the retirement age and/or pension amount. The French Court of Auditors has thus estimated in its 2019 report that 1 out of 7 retirement pensions is wrong.
Sapiendo-Retraite’s pension balance sheet solution is unique, combining a digital platform with the human support of a retirement consultant. It thus proposes to:
- Make an accurate estimate based on the client Statement of Status (RIS) of their pension entitlements and amounts at different retirement ages and based on multiple and customized projection assumptions;
- Verify the accuracy of his/her RIS and, in case of error and/or deficiency, access to regularization request letters to send to agencies;
- Benefit from advice to optimize his PAYG retirement on early retirement, quarter buyback, progressive retirement or job-retirement schemes.
Groupama-Gan and La Banque Postale have also recently partnered with Sapiendo-Retraite to enrich their digital retirement solutions offering. The aim of this new cooperation is to provide clients with support in preparing for their retirement, by proposing a comprehensive approach that includes both PAYG and funded retirement.
Prefon (#1 of the supplementary retirement of the public service with 400,000 affiliates) and CNP Assurances, pooled their expertise to help civil servants prepare and live their retirement through the ‘Lyfe’ digital services platform. In particular, they have partnered with France Retraite to offer a career balance sheet analysis service to highlight any discrepancies between calculated and real entitlements.
Innovative services
Groupama Gan Vie launched in Nov. 2019, with cashback operator Paylead, the HUG program, which allows Groupama retirement savings product holders to automatically transfer to their retirement savings plan a percentage of their expenses incurred in a network of partner stores (online or offline).
The principle is simple. Once the app is installed, the user is prompted to connect his bank accounts (via the Budget Insight aggregator). From then on, Paylead’s algorithms track purchases made from its partners. These give rise to the reimbursement of a fraction of the expenditure (cashback). Finally, when the combined rewards collected reach €30, the balance is transferred to his retirement savings plan.
Given the modest contributions on long-term savings, this program can be described as a gadget. But it is part of Groupama’s broader strategy for retirement savings, focusing on information, awareness and pedagogy.
For Groupama, HUG represents a fun and new way to save painlessly and to strengthen the interest of its customers for their savings contract, when it is usually one of those products that they put in place one day and then tend to forget. But it deserves to be monitored and, above all, regularly updated, for example on the occasion of major changes in life. Thanks to the frequent automatic payments, it should be easier to keep in mind.
This is another way of embedding saving into the customer journey (see DigiBook article).
Author: Pascal Buisson - December 2019
[1] Plan d’Epargne Retraite (Retirement Savings Plan) - [2] Relevé de Situation Individuelle
