Thought Leaders Interview Series: Scottish Widows

An interview with David Holton, Director of Corporate Propositions, Pensions & Investment at Scottish Widows.

Customer Directed Digitization

“I feel very passionately that the end member is the reason for us being here, and it is their end-to-end journey that we are really trying to reinvigorate.”
David Holton, Scottish Widows

Insightive.tv: How important is end-to-end digitization to your current and future business model?

David: We certainly feel that it is an imperative now, in the market, to transact and support people using digital technology in a way the insurance industry is unused to. A lot of the industry, at the moment, is still quite paper-based and relies on manual processes. We are looking to improve automation and digital capability by investing £50 million in redesigning the whole end-to-end customer journey across our advisor, employer and employee services.

At Scottish Widows we have had the real benefit of being part of the Lloyds Banking Group and witnessing some great strides forward in retail and commercial banking. These are both transactional and educational in nature, and that has allowed our customers to better understand their finances.

What we are doing at Scottish Widows is bringing that capability to part of the market that has not yet experienced it. Our strategy is to look at it in three parts. We have advisors that want to be able to deal with us in a more seamless manner and are developing their own technological capabilities that we need to accommodate. We have employer customers who need information on how legislation is changing their pension requirements and responsibilities. We want to ease the process of doing business with us and take a lot of the administrative data concerns away from the employer through automation. Lastly, we have the individual members who actually own the pensions. I feel very passionately that the end member is the reason for us being here, and it is their end-to-end journey that we are really trying to reinvigorate.

We want to ease authentication processes and provide digital educational services. Historically it hasn’t been easy to access even some fairly basic information about their pensions and long return savings, which we now want to provide. Ultimately, we are asking ourselves — can we do things to make pensions more interesting and engaging to our customer base?

I think there is a real need for the end member to understand the value of saving for the long term. Legislation has been great at unlocking an interest in pensions that has never really been there before. But one of my concerns is that there is a gap being created in the market by this additional freedom coming at the same time as some advisors are walking away from certain services because of restrictions regarding commission on certain products.

Being part of Lloyds Banking Group gives us a unique opportunity to take some of the experience we have had in Retail and Commercial Banking and put something together that is really compelling for our pensions customers.

Insightive.tv: Does that mean that you see most of the drivers towards digitization as external?

David: Not entirely, but that is certainly a big factor. We are seeing an increase in customer demand for digital engagement. The millennial generation certainly expects to be able to transact with us on their smartphones. They are used to doing that with their banking, so they want to be able to do it with their insurance and long-term savings products. We also have a real desire to help support and guide people through something that is quite complex. And, therefore, there is also a push from our side to do more and do it better for those customers.

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Insightive.tv: How did you develop your current digital transformation strategy and agenda?

David: I took a team of handpicked people from all across our Group. People from Operations, Finance, Risk and many more — basically the whole system. They were brought down to London for six weeks and we mapped out an entire end-to-end process for digitizing pensions at all stages of the journey. This is providing digital solutions to people who want to open a pension scheme to those who are now retiring. Our goal was to look at this from the perspective of what we would create if we could start from scratch and not have to consider existing systems or processes.

This customer map that we created allowed us to then focus in on what we perceive as the main things that would improve the customer experience — these customers being advisors, employers and employees. We created a couple of environments where we are able to test certain things without having them in the live environment. All of this has been done alongside our customers, using their feedback along the way to deliver at pace and create a truly differentiated offering. We have also invested time on this program building capabilities for the future, in addition to building digital capabilities for customers.

The current way of delivering change can take weeks or months to go through the whole end-to-end testing and building process. There are new tools out there that can cut that time down to minutes or days. Because we have now filled that capability, it is allowing us to work at a pace that was not previously possible. This has also allowed us to bring customer testing into the development process, earlier, and much more easily and extensively.

In the space of just eight months, we have developed a digital system that is now in the live Lloyds environment. The real differential in our development process is that it was really focused on the customer journey, and when we were designing this, we did it with our customers at every stage of the process.

We are now looking at the demand that stems from these developments. So this isn’t just building something that gives customers access to their long term savings. We are looking to build something that stimulates awareness and a capability to transact in a manner customers want. What I try and do as much as possible is look outside of financial services for inspiration. Everybody talks about what other pension or insurance companies are doing. We have thrown the net wider and looked at what other industries and firms are doing that is attracting people digitally — what aspect of their service really excites people?

Insightive.tv: What are the biggest challenges you have faced leading these digitization projects?

David: One of the challenges you have running a program like this is not getting too carried away with the amount of things that are out there. What we are trying to specialize in at the moment are what people and customers tell us are important to them, rather than just going after the next new technology.

I am trying to have quite a structured approach to this. For our Employee customers, the number one priority is helping people log on easily, understand what they have in their pension and then provide them with good tools and guidance to understand this better. Access and engagement are key. We are starting with the basics and using that to allow our customers to guide our next steps. This will make sure that they are the most relevant ones we could be making.

For our employer customers, we are focusing our digital investment at regular interactions that our existing customers need to make with us — such as paying contribution files. We want to make that as streamlined and efficient as possible to make the ongoing customer experience as simple as possible.

Of course, we are also looking at what new and exciting ways there are to create this engagement and get people better understanding the value of long-term saving – watch this space!

Insightive.tv: Do these considerations impact what you see in the future for digital transformation within the pensions sector?

David: Absolutely. I think that the key thing for me is that this is about so much more than digitization. The important thing is to digitize things that should be digitized, where it’s relevant for customers.

So we aren’t just taking our current processes and putting them online. Firstly we are making sure that our processes are as efficient as possible, and then working out whether or not it is right to digitize them. To my mind, there will always be certain things within this industry that will retain some level of manual interactions. Bereavement claims would be a good example of one where actually having that personal interaction with the customer is still the right way to support that customer need.

This was exactly the goal in our mapping process — taking a hard look at all our services and deciding where digital would really add value to that process. We are incredibly serious about the role that digital can play within this market. And we are making quite a significant investment in designing something that is right for customers and having that as the key driver. The customer testing that we are doing, and the fact that customers are in there right from the start, is helping us not only with the design but the iteration. This is a key differentiator for what we are doing and how we are doing it.

David Holton
Director of Corporate Propositions, Prensions & Investments, Scottish Windows

We sat down with David to get an understanding of how digital customer innovation has impacted success at Scottish Widows. Scottish Widows offers life insurance, savings and pension products, and investment services to almost six and a half million customers. Founded in 1815, Scottish Widows is now a part of the Lloyds Banking Group and is one of the highest ranked pension firms for customer satisfaction.

Originally published on October 20th, 2016, this article is part of an interview series produced by Insightive and OneSpan (formerly Dealflo). Insightive is an industry group in the UK focused on financial contracting and digital transformation. Acquired by OneSpan in 2018, Dealflo is a leader in identity verification and end-to-end financial agreement automation services.