Most retirement funds in South Africa still rely on the South African Post Office to fulfill their obligations to communicate with members especially when it is time to distribute benefit statements.
Retirement technological advancements over the last decade have enabled companies to innovate their interaction with their target audience and customers. COVID 19 has highlighted the need to adopt more digital channels and expand the view of companies and funds on what constitutes effective communication. The introduction of apps and data-friendly messaging platforms has provided a freedom that is yet to be fully exploited.
The South African Post Office (“SAPO”) struggles to meet the obligations of all stakeholders involved. With only about 55 branches out of 1416 branches profitable, cash flow struggles and employment issues bode the largest cause that the state-owned enterprise cannot provide dependable service to both corporates and South Africans.
As a result, many retirement funds experience delays in communication when sending through important information such as benefit statements, newsletters, and other crucial information relating to their funds. SAPO has been struggling for many years but the COVID-19 pandemic has compounded and exposed the extent of the national postal services struggles. As a result of this, the industry finds itself searching for innovation and creativity. The need for effective communication is larger than ever as fund members across the nation seek information in a time of uncertainty.
Of course, many retirement funds have turned to digital mediums such as SMS/MMS, USSD, and e-mail to communicate with their members. SMS communication is limited by a character limit which hinders how much information can be conveyed understandably. MMS communication opens the avenue for more characters and multimedia however this medium is not as cost-effective as SMS and requires members to download the content required.
E-mail communication has revolutionized the communication industry. Almost every entity that is trying to make a mark uses e-mail campaigns to promote and communicate. However, the overload of spam e-mail and promotional content creates an opportunity for members to miss important e-mails communicating essential information. E-mails work well for office-bound employees but are ineffective for the general workforce.
Sending sensitive information over e-mail can also be exploited by security vulnerabilities. The majority of e-mail services such as Gmail and Outlook do not provide end-to-end encryption and data may be accessed by third parties and advertisers. Some financial service providers try to secure the information sent through to their clients by requiring a password to access attachments. In most cases, users are only required to enter their ID number or date of birth.
Depending on the target market of your fund, the above-mentioned mediums are viable options, but South Africa is a diverse nation and a large number of the population may not have e-mail addresses. This means that whilst these are great tools for many retirement funds to use, most funds rely solely on the South African Postal Service to fulfill the obligations to the fund members.
WhatsApp for Business
WhatsApp, the freeware application that is used by the majority of people, launched WhatsApp for Business in 2018. This brought a unique opportunity for businesses to use secure chats to communicate with their clients. WhatsApp for Business allows any firm to automate, sort, and quickly respond to messages.
WhatsApp has further created more opportunities by launching the WhatsApp Business API (application-programming interface). The API has given developers around the world the opportunity to rethink and innovate the interaction between a business and its target audience.
What does this mean for the Retirement Industry?
Most people who own a basic smartphone have access to WhatsApp. WhatsApp’s cost-effective messaging and VoIP (Voice over Internet Protocol) calling has drawn over two billion users across the globe This means that retirement funds across the world can use WhatsApp for Business to communicate effectively with members. With the correct development, retirement funds can securely integrate with the WhatsApp Business API. Members of the funds will be able to access their fund information, benefit statements and other fund related information by simply using the messaging tool that the majority of people use today.
WhatsApp provides end-to-end encryption and developers can program in security systems to verify the identity of any user before providing any sensitive data. WhatsApp also allows the use of multimedia content. This means that multipage statements and newsletters can be issued at a fraction of the cost of traditional print and post methods.
With the uncertainty and unreliability of the South African Post Office, it seems like there is no better option than for retirement funds to move to this secure digital platform to distribute benefit statements to members.
by Hayden Naidoo