Innovation Interviews: Scottish Widows on gamification and pensions

Can your smartphone guess how old you are?

You may have already tried out or been shown one of the myriad apps that use facial recognition technology to estimate how old you are. They can be good for a quick laugh – or a confidence boost, if the guess is low – but have little other practical use.

Robert Cochran saw this technology’s potential to get people thinking about their retirement and take the important first steps towards engaging with their pension savings.

This journey started in 2016 on a bus – specifically, a strikingly decorated double-decker bus specially commissioned by Scottish Widows for Pension Awareness Day.

While searching for new ways in which to get people thinking about their retirement, the Scottish Widows team produced ‘Age Me’, which generated a photo of an individual digitally aged to show how they would look when they reach retirement. Visitors to the Pension Awareness Day Tour Bus would get a photo to take away with them.

This evolved into a more interactive, smartphone-based app that people could make changes to and explore what they might look like depending on when they were able to retire.

Last year, Cochran challenged his team to produce something new that could be used at virtual events, not just in person. The Pension Mirror is the result of this work.

The impact

Scottish Widows’ Pension Mirror can not only guess your age but also provide some useful pension-related information. It’s a simple but effective tool.

Cochran explains: “I shared it through my LinkedIn profile at the start of a five-hour train journey. By the time I arrived, my feed was full of people sharing images of themselves, most coming out as being a little younger than they actually are.

“That was the fun bit. But then I was being contacted by people from all over the world saying, ‘This is how you should do pension engagement, why isn’t it done like this everywhere?’.”

When Scottish Widows put it out more widely, it saw a massive positive impact on engagement.

In the weeks following the official launch of the mirror there was a 193% uplift in registrations for the Scottish Widows app, which allows customers to engage with their pensions and other savings products.

The mirror also led to a 135% increase in employee engagement in virtual events and a 40% increase in the number of employers taking part in such events. A subsequent Facebook advertising campaign led to even more activity and further increases in engagement.

It was this impressive engagement boost that swung the Innovation Awards judges, leading to Scottish Widows taking home the DC Innovation Award at last month’s Investment Innovation Summit.

Mirror, mirror

Given its simplicity and apparent effectiveness, I have decided to put it to the test.

You don’t need to download anything – just a simple search for “pension mirror” brings you to the appropriate website.

After a couple of seconds scanning my face, it puts me at 38 years old – which is only five months out at the time of writing. Not a bad start, and there is the option to adjust the age if it’s not quite right.

The same screen tells me that the average 38-year-old has saved £26,900 for their retirement, citing data clearly sourced from the Office for National Statistics’ Wealth and Assets Survey 2018-2020. I am pleased to see that I am comfortably above this average.

There is then a simple ‘call to action’, encouraging me to download the Scottish Widows app if I am an existing customer. (I’m not, but I will be upping my contributions with my provider anyway.)

It is a remarkably simple premise, but the impact has been huge.

“Over the last four months, the number of times people log in to the Scottish Widows pension app has increased by 50%,” Cochran says. They typically follow a pattern of asking three questions: what they have in their pot, whether it is enough, and what they can do next.

The third element of this leads us on to discuss pension dashboards. Scottish Widows teamed up with Moneyhub earlier this year to allow users to connect other pensions and financial products to their app – and already more than £600m worth of pension savings have been connected through the same kind of technology that powers open banking.

“One in nine people have connected other accounts through open banking – there’s nowhere near that in pensions,” Cochran says. “But you’re beginning to see that people are locating their other long-term savings and pensions.”

The ambition is that this connectivity increases to include other products such as mortgages, but for now users are focused on pensions.

The app-based approach has benefited Scottish Widows in the run up to dashboard connection deadlines, Cochran points out, as it has embedded pension data into its banking app for its customers that have both bank and pension accounts with the company.

For many pension schemes and providers, however, this kind of connectivity is still some way off.

“There will be a lot of schemes that haven’t had to get their data organised in this way before,” Cochran says.

“The fact that we’ve been showing pension values next to people’s bank accounts for more than five years means the call on data has been extremely high. That soon flushes out any mistakes in terms of data held.

“All the providers that don’t have apps, you’d be concerned about. They have never had to digitise that data and get requests for it on a regular basis.”

Gamification of pensions

After the success of the Pension Mirror, what is the next step for Scottish Widows on their technology journey?

At a recent event for financial advisers, the company’s new CEO Chirantan Barua highlighted that the “gamification of pensions” was the future. Embark Group – like Scottish Widows, owned by Lloyds Banking Group – has launched a dedicated technology training centre in Dundee to support the group’s technology ambitions.

Cochran explains further: “We’ve brought in people with PhDs in gamification and gaming. We are looking at the different gaming models to see how we might deliver this.”

He cites Duolingo’s awards-based system for language learning as well as Pokémon Go’s augmented reality approach as sources of inspiration. However, the next pensions-related game might have more in common with flight simulators or even the wildly successful Sims franchise.

“If you use that kind of model to create a virtual retirement in which you can test out different things, then – a bit like a flight simulator – if you ‘crash’, nobody is going to get hurt,” Cochran says.

“We can create those different pension ‘models’ that you can go in a play around with. The first one is just a game to start getting people to think differently about things like compound interest.

“It’s not the most exciting game in the world, but it is a starting point for how we move into gamification as a way of engaging people.”

If it has a similar impact to the Pension Mirror, these developments can only be a good thing for the pensions industry.