Fast five with Fintechs - A.S.A.P. and Optimum Pensions

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Jim Hennington, Consulting Actuary, knows it takes time to build technology that hits the 'sweet spot'. Even then, getting it in front of users who trust your brand can be a trying game of "tenacity versus resources". He shares his journey learning to surf the wave of entrepreneurship.

About the fintech:
One is called the Accountants Scaled Advice Platform, or A.S.A.P. for short. It's is a digital advice platform that we have patented and SMSF accountants refer their clients to. In the past, accountants were able to give a small amount of financial product advice but now they must refer it to an Australian Financial Services Licence (AFSL) holder like us. 
I'm also working for Optimum Pensions which was launched in 2017 to provide a superior solution to longevity risk and help Australians lead a more comfortable retirement. Our investment linked lifetime income solution is designed to provide every retiring Australian with a near inflation-based income to maintain their standard of living.
1. What skills do you need to succeed in Fintech/Insurtech today? 

Fintech is an evolving field and in many ways, it has existed for decades.  The pace of innovation has really picked up in light of cloud computing and the fact that systems integrate with each other more and more. Digital is the new normal.

An actuarial degree will give you a solid understanding of modelling and a robust, analytical way of thinking. But you need a broad range of skills in fintech given that it normally starts with a small team who have high targets and therefore require a wide range of practical skills. The skills needed include IT, project management, legal, compliance, marketing, finance and PR. 

It's not enough to build something that is excellent in its own right. You have to bring a lot of different stakeholders with you, the main group being the customers!  

You need to be confident and have a lot of conviction. There can be naysayers whenever there is innovation going on. Some people don't like change. 

"I once sat in a room with about 10 specialists of various fields telling me it can't be done for a variety of reasons.  I said, 'If we know this is a better way, and we have the ability to make it happen then why wouldn't we do it?' 

Their Senior Actuary was the only one that backed me to begin with, and luckily the others all listened to him. That company is now extremely proud of the leading-edge technology we built for them.  

I've learned that compliance professionals are likely to say 'no' when in fact, they just aren't sure.

2. What are some of the highs and lows of an entrepreneurial path in Fintech?  

Adoption is the major challenge for any fintech that needs high volumes to succeed. 

It's all very well to build something that is awesome, but if your customers don't know they need it, or aren't familiar with your brand yet, then it's a difficult game of tenacity versus resources. 

"The best analogy is surfing. You don't want to start paddling with all your might if the wave is still a hundred meters away. You've got to be fully prepared and have everything just right.  You need to get on that wave at the exact right time and before your competitors all get on it too."

The highlights are seeing your vision come to light, knowing you got the product right and working with other wonderful people who have vision and passion.

3. Where do you see the company in 12 months? What about five years?

Most accountants don't want to go down the AFSL route and so need to refer this aspect of their work to a licensed adviser or digital adviser. We are extremely well placed to pick up these referrals given we are online, rapid and inexpensive. 

I see this growing significantly over the next 12 months as the industry comes to grips with these new requirements. Then, over the next five years we are expanding the scope of advice we offer in line with customer needs. 

We have partnered with another brilliant fintech called 10E24 who offer a cloud based API for market simulations and stochastic retirement income projections. This lets us truly optimise a person’s retirement lifestyle.

The Optimum Pensions solution, called the Real Lifetime Pension, is part of the largest transformation to the superannuation journey for Australians since the introduction of compulsory super in 1992. The Real Life Pension solves the longevity risk Australians face in retirement – more than 50% of Australians outlive their life expectancy. To maximise your retirement standard of living over such a long period you need exposure to growth assets without the risk of running out and without the small pool risks of a GSA.

We feel very excited about offering such an innovative and capital efficient offering.

4. What’s your top tip for actuaries wanting to move into this space?

Be bold, but also realise it takes time to build technology that exactly hits the sweet spot. 

Don’t rely on securing huge market share in a short period if you currently have none. The best approach is often to partner with existing businesses. I use a mixture of consulting, my own new products and more traditional products.

Be agile, multi-skilled and get your timing right. Never ever forget the end customer. It's only if the end user thinks your solution is exactly what they need right now that it'll work. 

"Be agile and get extremely good at listening to a range of different audiences. "
5. What has had the most influence on your professional mindset?

In my first business we hit a point where my partner and I were overwhelmed with the amount of work we won. We were so swamped dealing with everything that we couldn't carve out time to step back and figure out how to actually grow the capacity of the business. 

A friend recommended a brilliant business coach who did a fantastic job helping us step back and become more conscious of what tasks we were doing every day / week / month. This let us break it all down into discrete functions that could be delegated successfully. Delegating then freed us up to take the business to the next level. 

These ways of thinking and frameworks for dealing with business issues have stayed with me ever since. Never underestimate the importance of culture.  

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About the author

Jim Hennington

Jim is a financial services innovator who specialises in retirement incomes and advice technology. A Fellow of the Actuaries Institute, he has a strong track record of applying institutional techniques to scaleable business models in the personal planning space. He was a finalist for the 'Fintech Thought Leader of the Year Award' in the 2018 Fintech Business Awards.

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  1. JDR says: 12:24 pm, July 5 2018

    Jim this is very interesting. Is anything published yet on the mechanics of the Real Lifetime Pension, or how the optimisation process will work?

    • JimHennington says: 4:50 pm, July 17 2018

      Hi JDR,

      The Real Lifetime Pension ("RLP") is an investment-linked lifetime pension, with a choice of investment options allowing it to invest in higher performing assets than a conventional annuity. RLPs offer stronger annuity payments than Conventional Lifetime Annuities and avoid the sequencing and asset/liability mis-matching risk normally incurred by the provider.

      The white label design product has been developed to enable super funds and insurance companies to meet the requirements of CIPRs.

      The RLP is offered as both an immediate pension payable to the member and any spouse, with a choice of minimum payment periods (to ensure that a large part of the investment can be returned on an unexpected early death) and a deferred pension with a choice of death benefits before the pension starts.

      For more information, you can visit the website http://www.optimumpensions.com.au/our-solution

      Jim

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