Defined contribution (DC) plan sponsors are on the front line of the retirement challenge in America – and make no mistake, it is a major challenge as 401(k) plans have become the primary savings method for retirement, a role they were never intended to fulfill. Still, the investment industry, employers, and plan sponsors have taken up the fight and continue to drive improvement in plan participation and savings levels. DC plan sponsors have been integral in those gains and in helping U.S. workers improve their financial well-being.
To help plan sponsors fulfill their responsibilities, Vanguard is leveraging technology to provide stronger, faster insights, including participant sentiment reporting, through a new-look and new-function online portal. The firm is a trusted partner to nearly 1,500 DC plan sponsors and has made a renewed commitment to providing them the tools they need by collaborating with Infosys, a global leader in next-generation digital services and consulting, with deep expertise in helping companies deploy transformative technologies to enhance their businesses. The goal: deliver a technology-driven approach to plan administration and fundamentally reshape the corporate retirement plan experience for DC sponsors and participants.
A highlight of the plan sponsor experience to emerge from Vanguard’s commitment to technology is a reimagined and upgraded sponsor portal. Fancy a personal concierge? That’s just one of the upgrades plan sponsors will experience.
“Think of it as a virtual assistant for a plan sponsor that surfaces tasks, reminders, and notifications to help them manage their day,” says Amber Czonstka, Principal and Head of Advice and Client Experience at Vanguard. Also in the works is a presentation builder sponsors can use to morph insights and data into a meeting-ready slide deck with the click of a button.
High degree of personalization
Key in the new experience is personalization driven by an Infosys solution know as Genome, which is a holistic offering that helps Vanguard decode its clients’ DNA, whether that’s the plan sponsor or participant. Genome is a boundary-less data platform that collates enterprise, digital, partner, and external data, and constructs client “genes” to build a self-service-driven and client-centric foundation for explorative, predictive, and prescriptive analytics.
“If you’re a treasurer at one of our clients your digital interface will look completely different to someone who is the head of global rewards, and using AI and the Genome engine we can study the places that are your most frequent destinations on the platform – what are the tools that you navigate to the most? What are the questions that you’re trying to answer? And using real-time machine learning we’ll start serving up those views to you,” says Czonstka.
The new technology will both provide a high degree of individualization to the DC plan participant experience and integrate that with Vanguard’s online plan sponsor portal. As a result, plan sponsors will get “nudged” when numerous participants seem to have unusual asset allocations, for example, or are frequently looking for insights on a particular topic.
Part of the information that plan sponsors will be seeing on their customized dashboards is plan participant sentiment reporting, which is an entirely new feature. “The technology creates a crowdsourced view of the key things that participants are dialing into the call center about, looking up on the website, or engaging about with a chat bot or via text message. This gives sponsors a window into the attitudes and concerns of their participants,” says Czonstka. “This might have been possible before on a periodic basis, but as we integrate cloud technology we’ll be able to serve participant sentiment reporting to sponsors in real-time.”
A logical next step after providing participant sentiment would be to provide some suggestions on how to act on it. Automated nudges solve that in part, but there is also a human element to it. “One of the Vanguard differentiators is that our plans receive strategic retirement plan consultants,” says Czonstka. “Think of it as your primary care physician in a healthcare plan. They continuously diagnose the health of your plan and help you think through strategic decisions. So, we could use automated intervention to say we suggest the sponsor contemplate a certain plan design decision, or a particular education campaign or outreach. But we’ll also always have human intervention where you can work with a consultant at Vanguard to help you interpret the sentiment reporting and decide on an action plan. I think many of our clients will still want that consultative touch.”
Innovation spurred by unique ownership structure
Such a holistic technology shift requires a nimble organization to pull it off, and also a dash of humility. Vanguard has no outside owners – its clients own its funds, which in turn own the company. This structure empowers bold decision-making that can improve outcomes for plan sponsors and participants. One example is work with Infosys to build the industry’s first fully cloud-native recordkeeping platform.
“It would have been easy to say, ‘We can do this ourselves. We could try to re-architect the platform in-house,” says Czonstka. “When you do that there’s a constant trade-off between spending money to recode the system or create new features. We also knew that a company like Infosys does digital transformation every day, all day, and that we are experts in understanding participant behavior, plan design and optimization, investment success, financial well-being, and advice. So, let’s partner with a fellow disrupter and bring forth change to the industry.”
Sponsors interested in exploring some of the changes Vanguard is developing can visit a custom website on the subject.
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