In less than 11 months, on the 1 August 2020, the FCA’s new mandatory investment pathways will come into force. This means the clock is already counting down the time that financial institutions with retirement products have to develop and implement a compliant solution for non-advised customers.

Guiding your customers into suitable investment products based on the FCA’s four investment pathways in the personalised manner that they expect is a going to be a big challenge. Relying on old, legacy technology, customer service teams hammering the phones or printed mailout packs to deliver it is going to be expensive and inefficient.

You need a solution that is rapid to deploy, scalable and innovative. ABAKA’s suite of Enterprise Applications offers financial institutions the ability to implement the solution at scale in a timely manner.

The four mandatory investment pathways are a big step forward for the industry. Through a simplified choice architecture, customers will be able to benchmark the four main options they have when accessing their retirement pot:

  • Option 1: I have no plans to touch my money in the next five years
  • Option 2: I plan to use my money to set up a guaranteed income (annuity) within the next five years
  • Option 3: I plan to start taking my money as a long-term income within the next five years
  • Option 4: I plan to take out all my money within the next five years

There are complex requirements that underpin the information displayed; such as the need to be able to illustrate the suitability risk of the investment products, how likely the person is to run out of money in retirement and signposting for sub-optimal decisions (such as mandatory warnings for keeping your money in cash); as well as full transparency on charges and reporting requirements for regular review.

This is a huge opportunity for the industry to win the trust of their customers. When presented with the once in a lifetime decision on how to use the money they have accumulated from their working lives to fund their retirement, the customer will most certainly reward the provider who helps them make an informed decision and achieve their goals, with their continued loyalty.

In recent reports, the FCA clearly articulates the magnitude of the problem: one in three consumers enter drawdown not knowing how they are invested. 30% enter drawdown unadvised. A third are wholly holding cash (having been defaulted into it by their provider) which means they risk losing out on large potential gains. A statistic underlying the market opportunity suggests that every month, five thousand pension pots enter drawdown without taking advice.

AI powered financial-advice-as-a-service can help banks and other financial institutions improve how they educate, engage and empower their customers. ABAKA’s conversational technology enables financial institutions to reach clients across multiple channels and interact with them where they are most comfortable. For example, instead of forcing clients to use a clunky, one-size-fits-all web-based forms, customers can ask for advice and support through a chat-based interface which can also be plugged into your existing digital channels and be made available on easy-to-use devices like Amazon’s Alexa or conventional mobile texting.

Furthermore, ABAKA’s Cloud-based solutions enable institutions which hold a great deal of information about their users (usually spread across multiple internal silos) the ability to securely unify this information in order to create actionable insights that can provide tailored and contextual advice to consumers. These intelligent nudges are a key part of the behavioural science methodology which underpins choice architecture and is the framework for the FCA’s investment pathways. Our unique nudging technology leads to better outcomes by influencing consumer behaviour through positive calls to action.

For a long time, the UK’s pensions landscape has been hard to navigate for many consumers who just don’t have the time or knowledge to seek out the best solutions for their individual circumstances. By leveraging ABAKA’s proven solution, providers can support a revolution in how people retire and allow their clients to gain personalised guidance that will help them plan their retirement journey as effectively as possible.

We are committed to help you meet the FCA’s hard deadline of 1 August 2020.

Act now.

For more information, please email ABAKA CEO and Founder Fahd Rachidy via