Alexander Forbes and its largest ever investment into digital services
Listed on the Johannesburg Stock Exchange (JSE), specialised financial services group Alexander Forbes provides retirements, employee benefits, health, wealth management, asset management and insurance solutions to institutional and retail clients across seven jurisdictions in Africa.
To drive its expansion across the continent, the company is undergoing a significant transformation under its new Group CEO. Titled Ambition 2022, its new growth strategy aims to transition Alexander Forbes to be a leading pan-African financial services organization, delivering the right outcomes to shareholders and clients. Its strategic anchor will help customers achieve financial freedom and a lifetime of financial well-being.
“We are a trusted brand and we are building a great place for our employees to work, where they feel they're having a social impact,” observes Group Chief Executive Officer, Andrew A. Darfoor.
“We want to have a bigger social impact across our markets. For instance, in our home market of South Africa, only 6% of South Africans can retire with any level of certainty or dignity, which by default means 94% can't. That's entirely unacceptable,” he explains.
“We therefore want to work with more people, both corporates and individuals to ensure that both employers and employees can work smarter to ensure that employees can reach retirement stage having much more set aside.”
With this in mind, Darfoor notes that unlike developed countries such as the UK and the US, individuals gain access to their entire pension pot in one lump sum once they leave their employer in South Africa, providing minimal financial incentives for many to preserve.
“Most people cash that money and then spend it. We therefore want the preservation rate to be as high as possible such that when people move from employer to employer, we can preserve the assets they have accumulated,” he says.
“There are a number of social impacts, particularly around retirement, that we're absolutely focused on in terms of having a much more social impact in our markets.”
Responsible for driving Alexander Forbes’ strategic anchor, Darfoor strives to support corporate businesses and individuals to provide employees with an integrated platform, encompassing retirement solutions, pensions, savings and employee benefits. In addition, the company provides exceptional financial advice through a broad range of solutions within savings, asset management and more.
“We want our clients to make smarter financial decisions and we have these broad range of solutions,” says Darfoor.
“Whatever clients need financially, we’ve got it. We partner with clients to help them make smarter financial decisions, whatever stage of life they’re in or whatever corporate they’re in to drive the right outcomes.”
Enhancing the consumer business
Investing over R1bn ($76m) to upgrade and strengthen its digital infrastructure, the largest single capital investment commitment in its 83-year history, Alexander Forbes intends to overhaul the way in which it engages with customers across its operations, spanning products, sales and the solutions provided to individuals to enhance the customer journey by making it more digital.
“We've got access to the entire portfolio of an individual. The question is how we then use this information to drive predictive analytics to better price and offer customers better services and solutions,” he says.
“We want a single view of customers and then aggregate that single view to drive more important decisions through data analytics. So, AI and data analytics are fundamental to our future business model.”
With a long-term goal to shift its customer relationship from payer to partner, Alexander Forbes is fully committed to becoming part of its customers’ life journey.
“It's entirely different if you think that the relationship is where my financial services partner can help me make smarter decisions that in turn help me reach the right outcomes. This simply gives you a more in-depth perspective much more than you could do by yourself,” adds Darfoor.
“The journey for somebody who's a millennial is also going to be entirely different in terms of the journey of somebody aged 55 and above.
“We use these insights to determine the type of advice and solutions that are most appropriate for your journey. Having the right technology including CRM and cloud-based systems is therefore essential.”
However, this has not been without its challenges.
Regarding cultural biases, where many markets consider insurance as a luxury item, Alexander Forbes aims to inform its customers’ view to one which where financial solutions are repositioned as an essential part of protecting what is important to them.
“I also often say that our biggest competitors in many markets are fast moving consumer goods companies,” explains Darfoor.
“It's a lot easier to go and buy the latest iPhone or flat screen TV rather than put that money towards pensions, savings or retirement. It's largely a question of education, intervention, and improving awareness. We’re trying to change behaviours to drive the right financial outcomes.
“The level of financial literacy is relatively low in many markets we operate in. So half the battle is improving financial awareness and education to then have a discussion around what's right for individuals, based on the outcomes they want to achieve.”
Partnering with Israeli technology giant Sapiens and FIS, a US based global provider of financial technology solutions, Alexander Forbes has sought to modernise its retirement, retail and digital platforms, spanning pensions administration, bookkeeping and recordkeeping.
“We're trying to get to the stage where an employee can look at their benefits, their pensions, contribution amounts, online, and then see whether they're on the right path to achieve the outcome they want,” says Darfoor.
Microsoft has also been brought on board, where the implementation of Microsoft Dynamics software has enabled the business to aggregate its customer data and build an online portal.
Taking on board the importance of engaging with customers on any device they wish to use, from face-to-face, digital or online, modernising its digital infrastructure to support its future growth has led to an improvement in the client experience, but also optimised Alexander Forbes’ ongoing costs.
“We plan to serve our clients more efficiently, more effectively at a lower cost whilst maintaining our ability to interact with them through whatever channel or media or device they want,” adds Darfoor.
Investing in the future
Whilst Alexander Forbes has stressed the importance of its digital transformation, the company would not be where it is today without its employees.
Encouraging a lifelong relationship with learning, the organisation has partnered with online learning platform Degreed to launch a new business, Alexander Forbes Empower, to customise its content for the benefit of staff members as well as offer this platform to corporate customers.
“If staff are interested in a specific area, they can go online and have access to that content. For us in the business, we can also push content and link it through a report. It becomes one additional channel of encouraging a lifelong relationship with learning to our workforce,” states Darfoor.
“We think this is critical and believe that 60% of the skills in the workforce today will, quite frankly, be irrelevant in 10-20 years’ time. So, the ability to reinvent, re-learn, to have that passion for evolving your skillset, I think is going to be critical in the workforce of the future.
“We’ve also now started to offer our online internal platform to some of our clients.”
Not one to rest on its laurels, the business has also placed significant focus on its corporate social responsibilities, which Darfoor states is not only ‘the right thing to do,’ but is also a great ‘recruitment tool.’
“Millennials are placing a great deal of emphasis on the company they work for having a social impact as it's cool for them to talk to their friends and their communities around what the company's doing,” he says.
“We have accelerated our engagement around social initiatives and embedded this through to our business model. We are also engaging much more with universities and have developed a graduate development programme in collaboration with a number of leading universities. We are also stepping up what we do in our communities much more actively than we've ever done before.
Whilst Africa continues to be a growing continent in terms of GDP growth, the discussion around financial awareness, as well as various financial products and solutions, remains an essential area of focus for Alexander Forbes in its ambition to remain a leader in the African financial services market.
“The business is on a transformation journey and we're on that journey to build a leading pan-African business,” concludes Darfoor.
“We believe technology is a key component but, ultimately, we're trying to change behaviours to ensure more people can retire with dignity.”