Transcript

Knowing your customer is not just a compliance issue; for pension providers it’s about understanding savers’ lives – sometimes even better than they understand themselves. John Glottrup of Danica Pension walks World Finance through its ingenious method of using anthropology and ethnography to provide tailor-made financial products. By focusing on the events that can transform consumers’ lives, he explains, pension providers can craft concepts, service models, and advisory events, that better serve customer needs. And he introduces the simplest consumer interface that Danica has developed, that is helping consumers realise they actually need to take action to secure their financial future.

World Finance: Know your customer. It’s not just a compliance issue: for pension providers it’s about understanding savers’ lives, sometimes even better than they understand themselves. Danica Pension has found an ingenious path to these insights; joining me is executive VP John Glottrup.

John, you’re working with a team of anthropologists to gain insight into the lives of your consumers. So tell me about that collaboration, and what insights it’s brought you.

John Glottrup: We work with a company called Red Associates: very insightful, very skilled. They work with some of the best brands in the world. And what they do is, they leverage a range of techniques such as ethnography and anthropology, which is about more in-depth studies of what really goes on when consumers make decisions.

So, we can ask a consumer what’s most important for them when they pick out an insurance policy, and people will give us the standard answers. It’s the cost, the expected return, the service, that people are friendly, and all of that. And not to say that these factors are not important, but when we pose the second line of questioning – what did you pay in costs last year, what was your return, when was the last time you actually used our service? – people will go blank. They will have no answer.

If you don’t understand, and you can’t remember, these things simply cannot be the reason why you decided to go in one or another direction.

What the anthropologists came back to us and said was actually, what makes sense is to understand what goes on in peoples’ lives.

World Finance: So how have you changed, based on the understanding you’ve gained from these insights?

John Glottrup: So what we’re doing now is basically concentrating our efforts – not to say that segments are not important – but we are more focusing on life events. What is it that’s happening in the lives of our consumers? Because that is where we need to be, at the right points in time, with the right services and the right products.

Let me give you just one example. Around the age of 55, something starts to happen. We see it very clearly in our data: activity picks up. People engage with us, they ask questions, they will ask for quotations on changes to their policies or their services. And we also see a lot of churn.

We had the anthropologists take a closer look, and what they came back with was that at 55, it’s just a symptom of something else going on. Because on average at 55, you become independent from your kids, so to speak. Kids leave the house, or they graduate from college. So you’ve got plenty of time, and potentially some more financial legroom. And you start wondering: so, how am I doing with my pension? Have I been saving enough? Should I be saving more? What’s going to happen for the next years of my life?

That’s the very narrow financial view. But the anthropologists uncovered that actually a lot more is going on. Because people start thinking about, should I buy a new house? Should I go back to college? Should I buy this flat in southern Europe to enjoy life a bit more? And once you understand that, it becomes a lot easier to actually craft a concept, a service model, and then an advisory event, that caters for what really goes on in the mind of the consumer.

World Finance: So how does it change the conversations that you have?

John Glottrup: As opposed to having a very product-centric conversation around the right insurance coverage, the right amount of savings, and the right life insurance, then it became more a conversation around: how am I doing with my finances in general?

So, do I have the financial situation that I want to be in? How would that look 10 years or 15 years out? Should I be saving more, or should I be saving less and spending more? So we’ve done this digital pension check, and we’ve done a completely new consumer interface.

What it is, is a traffic light: red, yellow or green. Very simple. How are you doing? Are you okay against what would be our professional recommendation? And if we put that tool in front of the consumers, what we uncover is that more than half of consumers will receive at least one red light. At least one. Which just tells us, we haven’t done the job. We have by no means met the target of actually making our consumers financially confident, and ensuring that they can use the pension for what it should be used for.

So it becomes a broader conversation which is not just about pensions, but is also about other sums of money, which is about all your financial assets, and your entire life situation.

I hate the word holistic, but in the absence of something better, that is actually the word. It becomes more of a package.

World Finance: The insights you’re getting really seem to have applications across the board, for peoples’ entire financial lives. So, you’re a subsidiary of Danskebank; is this insight informing its whole service?

John Glottrup: Absolutely – and when I say I hate the word holistic, it is just because it is a somewhat overused phrase. I don’t think that many financial institutions can claim that, you know, we’ve actually been able to deliver that kind of service.

What we are doing in collaboration with Danskebank is actually, enriching the picture. So, moving from a product-centric lens that is all about pension; to a broader perspective on your entire financial situation. And we have a vision in the group that actually, what we want to provide is financial confidence. In order to do that, we have to be trusted. And trust is something that you earn.

So, we need to enlighten and inform and help our consumers in managing their financial situations – not just on a pension, but on the entire financial situation. And that’s the only way we can build trust. That we do that in a reliable, and credible way.

World Finance: John, thank you very much.

John Glottrup: Thank you.