Mobile Retirement Plan Technology Now Commonplace
Mobile retirement plan technology is reaching new highs in 2018. It certainly makes sense that the industry is quickly favoring the move towards mobile retirement plan technology. Mobile is becoming the retirement plan technology of the day, and of the future. An overwhelming number of Americans (96%) now owns a cell phone of some kind, according to Pew Research Center. The share of Americans who own smartphones is now 81%, up from 35% in 2011 – the year Pew Research Center first conducted its survey of smartphone ownership.
Forbes recently published an article titled “Finance Pros Detail Nine Exciting Side Effects of The Mobile Payment Revolution.” Some of the so-called “side effects” were raising money velocity (the speed of a single currency moving through an economy) due to ease of payment utility, more time back in our days (mobile payments save the average person hours each week that they can use instead to relax, learn or spend time with family) and payment security for customers.
Plan sponsors are prioritizing the adoption of mobile technology in retirement plans. Giving to participants the opportunity to access their retirement account information from anywhere, and at any time, and having the flexibility to make investment decisions is important to most employers. It also matters to employees. Moreover, the industry is designing websites to be viewable not only on smartphones but on other devices such as tablets and wearables.
One positive “side effect” of mobile technology in retirement plans is personalization. More retirement plans are integrating artificial intelligence (AI) and machine learning into investment and retirement planning. This technology “learns” participants’ behaviors over time to help steer them toward investment allocations that are appropriate. Human financial advisors can make these assessments, but there has been a push in recent years toward more of an automated, technology-based approach.
Many retirement planning websites, accessible via smartphones and other mobile retirement plan technology devices, offer a plethora of digital tools designed to help participants assess their current financial situation and goals. Using mobile retirement plan technology, participants can easily take advantage of these tools anytime, anywhere to give a sense of how the portfolio is positioned well in advance of interacting with a human advisor. According to PlanPilot, “By providing people access to platforms that enable them to gauge their financial situation on their own, plan sponsors are able to boost engagement with the planning process and eliminate a lot of the rote work which advisors have traditionally been responsible for.”
Moreover, more plans are engaging robo-advisors to help participants calculate savings rates and obtain investment advice. Robo-advisors are also simple to access using a mobile retirement plan technology device. Certainly, robo-advisors cannot completely replace the one-to-one advice that human advisors can provide. However, robo-advisors do offer significant cost savings and offload some of the administrative functions that were traditionally performed by humans. That cost savings is passed on to participants, which is win for them, and for plan sponsors from a fiduciary perspective. In addition, robo-advisors can serve as a supplement to a human advisor relationship, allowing the latter to “scale” and spend more time serving participants and clients on a more meaningful, individualized level.
All of these innovations are making it easier and more intuitive for participants to save for retirement. The ease of use and personalization comes with some risk. That is where plan sponsors need to ensure that they are taking proper precautions when it comes to cybersecurity. Hackers are getting smarter and more adept at stealing sensitive participant data; it is imperative that plan sponsors and retirement plan service providers implement the highest levels of cybersecurity available, including things like two-factor authentication. We’ve discussed cybersecurity and measures plan sponsors can adopt in previous posts here.
Technology, particularly the addition of mobile retirement plan technology, is a benefit to participants in that it makes retirement planning more efficient, engaging and easy to do. Mobile retirement plan technology also “meets them where they are” in terms of allowing participants to access retirement and investment planning tools anytime and “on the go.” However, the use of mobile retirement plan technology does come with risks. So, it is important that while plan sponsors embrace it, they also take the proper measures to protect participant data and plan information against cyber attacks.
