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HomeUncategorizedDigital Pensions Platform and African Informal Market: Making It Work

Digital Pensions Platform and African Informal Market: Making It Work

African informal workers’ dominants its workforce, say for Nigeria 80% of her workforce are in the informal market. As the African market evolves with the growing success of Fintechs, we can finally bring “micro-pensions” schemes to millions of Africans in the informal market. An ambitious effort to create inclusive and affordable micro-pension schemes, these countries Rwanda, Nigeria, Kenya, Ghana, South Africa, and Uganda are pushing the buttons forward.

They are helping craft inclusive and affordable micro-pension schemes targeting their large informal sector workforce. PenCom, Nigeria regulator is angling to cover 30% of her workforce through the Contributory Pension Scheme (CPS) by 2024. The Micro Pension Scheme could help Africa access a huge pool of capital to drive infrastructure transformation. But we have to move rapidly from the old-school pension plans: hefty fees, high minimum contributions, and needless regulatory penalties and missed payments.

Technology is improving pension access. African firms should take advantage of these fintech disruptions by forging strategic partnerships with technology platforms. Yet we must connect this with quality personal services. Taking the mass market online would remain difficult except data and smartphone prices keep falling drastically. But taking African young people is a possible market and companies should look out for this as it will bring inefficiencies and help firms make sense of the post-Covid19 world.

Enjoying the benefits of tech-enabled pension services would mean African firms can prioritize investment in this new technology. Every African firm should make significant investments in technology as part of its growth strategy driven by a focus on innovation in the pension market as well as efficient and timely support of the informal market through a digital layering of existing informal structures.

Digital layering and digital pensions platforms

We can accelerate pension access through digital pensions platforms which can make services more efficient for informal market members and employers, with the capacity to support an end-to-end, collaborative approach. We believe overlayering extensive online capabilities on informal market structures could help informal traders and workers see their benefits and edit personal data as well as initiating, tracking, or completing processes by ‘Online’. African informal market is driven by tribal associations, enforcement systems (pressure groups), and a wide network of influence age groups who can bring control and enable the better collection of pensions.

Infusing digital pensions platforms into the African informal market is a brilliant opportunity for digital layering this market. While African firms would realize significant processing savings, going digital by providing this informal market with tools (both digital and others), can help us save time spent chasing informal market workers who are skeptical about pensions.

Digital layering the informal market with pension product allow employers and administrators to collaborate efficiently, quickly solving issues and keeping track of all informal market pension actions with a full audit trail. A simple form collecting trader data enabled by chatbot functions on this trader online member portal will allow them to make simple queries that can be answered quickly and seen by all involved on that group platform. It is simply giving informal workers with basic learning capacity or digital training and tools to self-manage as well as collectively for the whole group.

We can’t automate pension now for the informal market

Micro-pension is hard. Dealing with the informal market in collecting micro-pension or even enhanced schemes remains hard. But a digital layering of this market with a funnel system that keeps taking data of participants would help us keep fine-tuning micro-pension products and their likes. That must be anchored on a strong focus on governance, risk management, and efficiency, enabling demand for these pension schemes to continue to grow.

Digital layering this informal market boosted by self-service portals can go hand in hand with improved service levels which can make pension attractive for the informal market. Then we can draw in more robust data insights and we can gradually introduce automation and self-service capabilities which will significantly improve their experience, reduce costs and backlogs. Note that automated processes and workflows while can eliminate human error, can also assist in maximizing control of risk, while giving peace of mind around compliance with pension regulations.

A pension scheme with the future in mind

Digital layering the informal market for pension management or collection can help operators make decisions as accurate comprehensive data get funneled into such platforms, reducing the need for human involvement. More data would boost automation capabilities of pension operators, enable informal market customers and their platform managers to adopt an ‘Administration by Exception’ servicing model; where work only goes to a human when something is missing, or the query is complex and requires input from a pension administrator/expert.

It is only normal that the next step is to harness artificial intelligence which can offer us even higher levels of automation at a lower cost. For instance, we can enhance the informal market member experience by using AI chatbots on online member portals to quickly address member questions as our understanding of this market grows in the years ahead.

Finally, there is growing proof that technology platforms make a real difference to how we engage the informal market. Digital solutions can boost pension schemes for informal market members especially bringing access to this market and importantly crunching the available data to enable us to serve the informal market better. Advances in areas such as artificial and assisted intelligence and improved data analytics can help us expand not only access but deliver prosperity to all. But African pension providers must change the way they think and operate, digital layering the informal market networks patiently could impact their success in a post COVID19 world and beyond. 

Written by Caesar Keluro, Co-Founder/CEO, Nanocentric Technologies Limited. He leads ‘Make In West Africa’, a regional Think-tank. He tweets https://twitter.com/KCaesar,  https://www.linkedin.com/in/caesarkeluro