Digital Communication Design
As the use of digital and mobile technologies for employer-sponsored retirement plans continues to increase, a paper promoted by the Voya Behavioral Finance Institute for Innovation proposes that plan sponsors and advisers have a responsibility to consider websites and mobile applications that encourage better retirement decisionmaking.
The paper, authored by Shlomo Benartzi, business school professor at the Anderson School of Management, University of California, Los Angeles (UCLA), and senior academic adviser at the Voya Behavioral Finance Institute for Innovation, discusses how research in the field of behavioral science reinforces the role that digital resources can play.
Benartzi points to studies showing that, for example: The number of blank lines on a retirement plan website can help shape an employee’s level of diversification; enhancing the design of an enrollment website can increase, by 15%, the number of workers who personalize their enrollment choices and increase overall plan contributions by 10%; and presenting higher default contribution rates in an online enrollment setting—those double and triple the typically suggested 3% default savings rate—can increase savings rates without reducing enrollment.
“In an age when many individuals are making important financial decisions on their digital devices, research tells us that the design of the screen—how information and choices are presented—can dramatically impact the way workers save,” says Charlie Nelson, CEO of retirement and employee benefits for Voya Financial. “Because digital design can have a strong influence on long-term results, it’s important to use design elements that support a plan sponsor’s ultimate goal of helping its employees achieve a secure financial future.”
Andrew Way, director of research – annuity, life insurance and retirement, at Corporate Insight, says, while website and digital design is moderately important, it is growing more so every year. It is—or should be—part of the request for proposals (RFP) process for retirement plan sponsors, and it is valuable to the participant experience, he says.
His firm examines how financial service companies connect with prospective and current customers via digital channels and provides them with research and actionable recommendations to improve their digital offerings and overall user experience. He adds that access to information can boost participant engagement.