Not everyone shares my passion for the outdoors. I enjoy pushing myself during outdoor excursions, but I know people who are put off by the cost and perceived risk.

My previous blog post described how the retirement services industry hasn’t advanced technologically as much as comparable industries, such as the insurance industry. Two major reasons that explain this phenomenon are the two that I gave above: cost and risk.

The industry takes pride in its important work supporting generations as they move into retirement. And insiders are well aware that in order to continue to do so and remain competitive, they must maintain their status as both highly respected and financially sound institutions. I’ve found that providers are currently reassessing how to successfully balance these objectives as they look to drive positive outcomes to those they serve, as well as to the bottom line.

This couple isn't put off by the risk of the outdoors.

This couple isn’t put off by the risk of the outdoors.

Now take a look at the infrastructure spend at most firms. It represents a significant corporate expense and in most cases is disproportionately applied to the modification or maintenance of legacy platforms in an effort to meet required compliance provisions. Capital investments are often prioritized to keep up with the competition over improvements related to efficiency, customer experience, or overall innovation.

Beyond the critical factor of cost, I’ve also observed that the prospect of changing retirement technology itself poses a far greater risk than it does to other industries. Negative experiences with major infrastructure changes in the past have set the expectation for substantial service disruptions with long term, painful repercussions.

So why not modernize? Untangling and rebuilding an infrastructure that was built over a 20-30 year period while managing billions in assets is understandably not easy, nor for the faint of heart. The challenge may be almost too big to comprehend, let alone tackle. Budgets are low and the prospect for risk is high.

Looking Outside the Box

Today, we can all see the power of modern technology. Whether it’s communicating, working, or shopping, we are using technology in virtually every aspect of our lives. Consumers demand flexibility and convenience, and technology is constantly changing to keep up. One can only imagine that these same expectations will eventually apply to retirement services.

I see the benefits of advancing the technology infrastructure of the retirement industry, but I’ve also experienced some of the tremendous impediments to challenging the status quo. These are indeed very difficult decisions for our industry’s leaders to assess; yet I believe that the companies with the courage to take risks will emerge as the true market leaders and move outside of today’s limiting constraints.  My personal goal throughout this journey is to continue to learn and to play an active role in applying new technology innovations to help transform an industry in need of modernization. To read more, please check out my opinion piece, Observations of an Industry Newcomer.

  • assets
  • bottom line
  • budgets
  • capital investments
  • compliance provisions
  • convenience
  • corporate expense
  • cost
  • Customer Experience
  • efficiency
  • flexibility
  • infrastructure spend
  • innovation
  • insurance industry
  • legacy platforms
  • market leaders
  • modernize
  • observations of an industry newcomer
  • outside the box
  • positive outcomes
  • retirement services
  • retirement technology
  • risk
  • service disruptions
  • status quo
Ron Karam

Ron Karam Ron is the President of Sapiens’ North American Retirement Services and Insurance division. A seventeen year veteran of the Life and Annuity business, he is now focused on bringing new technology to the Retirement Services industry. Ron resides in New Jersey with his wife, Eileen, and together they share a passion for the outdoors and spending time with friends and family.