We sit down with financial wellness specialist ABAKA’s CEO to chat about Artificial Intelligence, the retirement crisis, digital financial advice and hibiki…
1. Tell us about your company, products and services.
ABAKA is a Financial Wellness platform powered by cutting-edge Artificial Intelligence. We help people save by powering an affordable and intelligent financial education and advice service for every worker on earth.
Financial stress at the workplace has a direct impact on businesses. We help employers engage, educate & empower their employees to take control of their money and make informed financial decisions.
Additionally, we also licence our machine learning technologies to financial institutions and help them deliver digital full regulated financial advice and intelligent actionable nudges to their customers.
2. What have been the biggest challenges the HR sector has faced over the past 12 months?
30 million workers in the UK risk running out of money in their retirement! Can we really accept that 80% of the working population today won’t be able to achieve the retirement they desire simply because they can’t access any help or advice?
We are sleepwalking into a retirement disaster if we don’t improve employee engagement and access to financial advice. The level of engagement with pensions is dangerously low and I believe that the biggest challenge the HR sector faces today is to ensure their employees understand how much they should be saving into their pension, and what are the options available at retirement.
3. And what have been the biggest opportunities?
The most exciting opportunity in HR right now is to be able to contribute to making a meaningful difference to employee’s lives – HR practitioners often tell me that they joined the profession to help employees and this is the chance to drive meaningful improvement for over 80% of your workforce.
We need to help employees truly improve their financial situation by enabling them to take actions and implement meaningful changes to their financial behaviour, on their personal expenses, debt, savings or pensions.
Existing reward & benefits programmes have been focusing on offering short-term perks and rewards which are great as they provide instant gratification for employees. However, research shows that these do not reduce the overall level of financial stress (and its associated mental & physical-health issues) at the workplace.
4. What is the biggest priority for the HR industry in 2018?
The cost impact of financial stress and its related issues at the workplace can be dramatically high for an employer (up to £4,500 per year per employee according to our research)!
Given the existing cost pressure across all sectors (high competition, trade barriers, recruitment, Brexit, etc), there are very simple use cases that HR can implement with clear quantitative objectives and KPIs to demonstrate that an effective and scalable financial wellness programme can increase the business profit margins.
It is a win-win situation for the employee and employer and it is the right thing to do.
5. What are the main trends you are expecting to see in the market in 2018?
Until recently, financial wellness programmes have mainly been implemented by SMEs, whilst large employers were using collective buying power to secure discounts for their employees. This is changing, and larger organisations are now looking at implementing such solutions too.
The critical factor for the success of such an initiative in a large corporation is to combine scalability with personalisation of the financial help: this is where you need to be digital, mobile first and cost-effective.
6. What technology is going to have the biggest impact on the market this year?
Artificial Intelligence, as it helps solve the scalability and affordability issue.
7. In 2020 we’ll all be talking about…?
Digital financial advice. There is a possibility that providing access to advice at the workplace becomes compulsory. This would be in line with the latest FCA Retirement Outcome Review and call of the pension minister for this. At the very least, financial guidance will be required, so employers and providers alike should brace for impact.
8. What’s the most surprising thing you’ve learnt about the sector?
Seeing the passion in the eyes of people who care about employees.
9. You go to the bar at the HR Summit – what’s your tipple of choice?
10. What’s the most exciting thing about your job?
Thinking about the economic and social impact we have helping modest and hardworking people like my dad achieve the retirement they dream of.
11. And what’s the most challenging?
12. What’s the best piece of advice you’ve ever been given?
Whatever circumstances life brings you, you will be more likely to succeed and ﬁnd happiness if you take responsibility for making your decisions well instead of complaining about things being beyond your control.