Retirement Industry Leveraging Artificial Intelligence for Maximum Benefit

 

Retirement Industry Leveraging Artificial Intelligence for Maximum Benefit

What influence will AI have on the US retirement industry?

In the past, the US retirement sector has hesitated to embrace cutting-edge innovations. The entry of numerous young, tech-savvy individuals into the US workforce forces the US retirement plan industry to adapt to evolving clientele expectations. AI, including machine learning (ML), large language models, and even ChatGPT, is used by tech-inclined retirement plan providers, recordkeepers, and third-party administrators to digitize and automate monotonous and repetitive administrative tasks, which reduces costs and burdens for plan sponsors while also improving the retirement experience for participants and sponsors. 

 

AI can play a vital role in the following areas:

1.    Benefits:  AI's increased efficiency streamlines the process for employees to access benefits and makes it easier, faster, and less expensive for plan sponsors to offer them. When AI provides these advantages, it can also aid in lowering the related legal and compliance concerns. Other possible dangers can be anticipated and flagged by technology, which can also notify plan sponsors of late deposits or other problems.

2.    Marketing and Engagement: To better serve clients and increase conversion rates, AI may help with code authoring and personalization of marketing materials. AI may also maximize participant engagement since, through a multi-channel strategy, chatbots, robo-advisors, and other algorithm-based technologies can lead and teach participants on demand and from any location. Advisors who instruct customers can also be trained using these technologies.

3.    Retirement Plan Design: Artificial Intelligence (AI) tools, including Machine Learning (ML) and predictive analysis, offer significant potential for enhancing the customization of retirement plan designs and supporting plan advisers in devising more effective savings strategies. This is particularly advantageous when there is a lack of comprehensive information pertaining to employees. By leveraging data from additional interconnected data sources and the unique information of each employee, it becomes possible to identify patterns and develop more precise or customized solutions.

4.    Investment Strategies and Risks: Artificial Intelligence can be incorporated into the company's customer relationship management (CRM) system to gather and utilize extensive data. Advanced AI can generate a portfolio distribution based on the investment options available or recommend the appropriate savings amount without the need for employees to respond to the typical risk tolerance inquiries. 

5.    Business Development: AI can facilitate the prospecting process for retirement participants by eliminating irrelevant discussions, such as promoting offerings that a plan sponsor may not require. This could simplify the process of business development. 

6.    Onboarding of employees: New employees can be onboarded with the assistance of AI, and accounts and investments can be established with just a few keystrokes.

 

Exploring the Adoption of Artificial Intelligence Among Elite Retirement Players Across the Value Spectrum

Several prominent participants in the US retirement industry have announced a variety of initiatives, and some have already implemented this technology. The following are examples of such players:

 

• ·       Utilizing Artificial Intelligence for Robo-Advisory Services: Leveraging the firm's Exchange-Traded Funds (ETFs) to craft tailored retirement portfolios for clients.
• ·       Artificial Intelligence-driven chatbot designed for customers to seek assistance or initiate transactions.
• ·        Employ artificial intelligence technologies to enhance client experiences, optimize self-service operations, and improve analytical capabilities, thereby facilitating more effective interactions within its National Contact Center (NCC).
• ·         Artificial Intelligence (AI) is integrated across the entirety of its Financial Wellness suite, encompassing its 401k platform.
• ·         Utilizes artificial intelligence to assist participants in making well-informed decisions regarding their financial well-being and provides guidance to employers in the design and structuring of their retirement plans.
• ·         To promptly and precisely address client concerns
• ·         Artificial Intelligence (AI) is also being utilized to enhance productivity levels. The implementation of automated reminders not only diminishes the volume of paperwork but also aids in facilitating informed decisions regarding retirement planning.
• ·         Artificial Intelligence (AI) assists in pinpointing potential retirement planning concerns that may be of significance to the client. Subsequently, it enables us to ascertain whether the advisor has addressed these issues with the client, and if not, it can encourage the advisor to initiate discussions on these matters as insights. Furthermore, we possess the capability to identify pivotal events, such as the approach to Social Security retirement age. This allows us to pose pertinent questions concerning these occurrences.
• ·         Exploring the potential of the most recent advancements in artificial intelligence to unlock new avenues for business growth, such as integrating AI technology into call centers to enhance products, thereby improving the overall experience for both clients and their employees.
• ·         Participated in more than 130,000 customer engagements across businesses specializing in wealth and health solutions, successfully resolving over 70% of cases following the introduction of its AI technology.
• ·         Instituted 401kAI, a platform engineered to enhance the efficacy of advisors' strategies, research, and endeavors in business expansion.
• ·         Artificial Intelligence (AI) facilitates rapid and effective communication with participants on a large scale. AI has the capability to identify opportunities for action, and subsequently, we can employ highly personalized digital nudges through various channels such as text messages, emails, and phone calls from our advisors.

 

What can be anticipated for the future of the retirement industry, its participants, and its stakeholders?

Predicting the future landscape of the retirement industry, its participants, and stakeholders is a task fraught with complexity. Potential developments include enhancing employees' access to retirement plans, augmenting investment offerings to better align with participants' behaviors and characteristics and offering more comprehensive advice. A pivotal use case involves plan advisers leveraging artificial intelligence for asset management decisions, marking an advanced iteration of 'robo-advisory' services and the creation of a drawdown strategy during retirement. 

Retirement companies are presently contributing significant data to the systems and instructing large language models on the art of investment. This approach is aimed at training these models on various financial principles, thereby enhancing their capacity to comprehend, scrutinize, and address investment challenges.

While AI currently exhibits and holds the potential for remarkable capabilities, the complete dependence on AI for financial guidance may be realized in the foreseeable future. This is due to the belief among industry professionals that the human element cannot entirely be eradicated, particularly given the emotional nuances associated with financial matters. 

In what ways may Sun Technologies help you?

We are equipped to furnish significant artificial intelligence assistance to the retirement sector by tackling major obstacles and augmenting operational efficacy, personalization, and risk mitigation. An information technology services company has the capability to provide essential IT support to the United States retirement sector, ensuring the seamless operation of their technological infrastructure, bolstering security measures, and elevating the user experience. 

Herein lies the way an information technology services company can offer support:

 

• ·         Infrastructure Management & Optimization
• ·         Cybersecurity & Data Protection
• ·         Disaster Recovery & Business Continuity
• ·         IT Helpdesk & User Support
• ·         Compliance and Regulatory Support
• ·         Cloud & SaaS Implementation
• ·         Data Management & Analytics Support
• ·         Software Development & Customization
• ·         Client Portal & Mobile App Development
• ·         Network Management & Connectivity
• ·         Automation & Workflow Improvements

 

The Many Ways Our AI Configurations Can Help

Configuring AI to Automate 401(k) Plan Administration Manual Tasks

·         Robo Advisors: AI Bots can double up as Robo Advisors to provide tailored advice to 401(k) plan participants.

·         Form 5500 preparation: Use data automation and AI Bot amplified review to correctly list plan sponsor information

·         Track Deadlines: Configure AI driven alerts to ensure plan sponsors and administrators are always on track with compliance deadlines

·         Raise Auto-Alerts:  AI can help raise alerts to ensure timely deposit of employee contributions and document loan defaults

·         Amplify Review: AI can speed up the process of annual reviews that have to be undertaken by the plan fiduciaries

·         Send timely notices: AI Bots can gather all necessary information and format it to send notices to participants, beneficiaries, and eligible employees

Impact

• Automate 90% of all manual calculations done by plan administrators
• Save up 80% of time spent on coordinating with sponsors manually
• Automate 95% of all sponsor uploads and data extraction tasks

 

By providing IT services, a firm can assist retirement organizations in optimizing their operational processes, minimizing expenses, enhancing data security, and elevating the overall experience for both retirement fund managers and retirees.