Feature insight - digital benefits
Is the digital benefits bubble about to burst?
Lisa Gillespie, human resources services director at Moorepay, discusses recent and potential developments for digital benefits
I n January a revolution – a major event – occurred, taking power away from the financial elites and giving it to everyman. It’s a big deal, but with the mainstream media battling the onslaught of fake news you could very easily have missed the launch of open banking. Here’s the answer, in the words of Imran Gulamhuseinwala OBE, trustee of the Open Banking Implementation Entity: “The goal of the UK’s open banking initiative is to allow consumers and small businesses the option to securely and safely make the most of their financial data. In time, open banking will give consumers and small businesses more choice, better services and cheaper products. “The UK is the first nation to implement a standardised open banking solution. In the UK we are creating a single technology standard enabling new services to be easily built and offered to consumers and small businesses. Open banking will help make Britain one of the best places in the world to bank and will, in time, stimulate the digital economy.” Very exciting, and all good news…right? Disruption to employee benefits Well, yes if you are a consumer, and it’s done in a manner that doesn’t expose us to new threat levels of hacking/data theft etc. However, spare a thought for digital employee benefits providers. Such operators tend to be third-party providers to employers in the UK and abroad, and this innovation could be just the sort of market disruption that sees these companies This is a first for us in the UK, but what is it – and what does it mean?
worth thinking about how widely this could change. Digitally disrupted markets grow and change very rapidly – think eBay, Uber, Amazon etc. And it’s not just the service providers themselves that have to keep up. Employers need to think ahead of these changes too, because these offerings are all part of encouraging employees to join and stay loyal. Innovation comes from understanding the market, and I would encourage any employer to conduct employee surveys regularly and ask questions about what benefits would make a difference. I would also encourage employers to think way outside the box, as this is what will essentially make or break the market in the future. For example, as things stand, benefit selection and choice are very regimented. Typically, employees get the chance to pick from a limited number of options once a year, which they are then locked into. Could you envisage offering something innovative like an app that could accommodate flexible (even, near- instantaneous) salary advances, providing a clear benefit to employees by helping them avoid the need for pay-day loans and emergency overdrafts? Is such a thing far-fetched? In a world with self-landing rockets, driverless cars and digital assistants making their way into the nation’s living rooms, I think not. But whatever the future holds, finding out what your employees want, and demanding that from benefits providers, is one clear way to keep your employer brand at the top of the market. n
become the ‘Blockbuster’ (the home movie and video game provider) of the future. While we don’t yet know who the ‘Netflix’ in this case may be – if you recall, Blockbuster declined to buy Netflix in 2000 when they offered to sell, thereby sealing its decline and ultimate demise – I have to say that I have not seen much new in the employee benefits platform sector for a while. ...conduct employee surveys regularly and ask questions about what benefits would make a difference Loyalty points, discounts, cashback, etc. It’s all a bit ‘old hat’, and that is why I think the advent of open banking might do one of two things, either: ● cut out the middle-man, so to speak, by putting service and product providers directly in touch with consumer spending habits for targeted discounting and offers, by-passing employers and their partners, or ● the employee benefit providers may have to up their game to continue to encourage employees to use employer-packages, which let’s face it, don’t and can never fully target spousal/household needs and spending patterns for selecting benefits. Preparing for the scale and pace of change Looking a little further into the future, it’s
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| Professional in Payroll, Pensions and Reward |
Issue 38 | March 2018
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