Fintech Robos develops MENA’s first digital ‘Payroll Savings Product’ to enable employer-based savings and pensions schemes

Ebrahim K Ebrahim

Pension Researcher & Chairman of the Annual MENA Pensions Conference

An estimated US$150 trillion has been accumulated in pension systems, thanks to the power of payroll savings

 

Since the emergence of Bismarck’s pension system in the late 19th century, pension systems around the globe are estimated to have garnered a total of US$150 trillion. Today’s global pension assets stand at around US$60 trillion. These assets have been accumulated through the contributions of hundreds of social security, social insurance, provident funds, superannuation funds, DC employee savings and private pension plans around the world. The key mechanism to enable this is the power of payroll savings. It’s hard to imagine how the world could have otherwise achieved this outside the payroll mechanism!

By harnessing the power of regular savings through payroll contributions, we can transform people’s behaviour, turning employees and households into regular savers. By doing so, we can deliver a more inclusive form of personal wealth. In the Middle East, nearly 80% of people do not feel confident about their financial future and less than 30% of those who work save enough on a regular basis. The adoption of payroll savings in the workplace will be key in turning around people’s financial insecurities and allowing them to safeguard their financial futures.

Payroll saving is the mechanism of making regular savings directly from an employee’s pay. An employer deducts the amount the employee wishes to save directly from wages via the payroll. Nearly all pension and social insurance systems around the world rely on the payroll savings mechanism to fund their national pension schemes. Employer-sponsored savings and pension plans provide employees with an automatic way to save for retirement while benefiting from tax breaks in certain countries.

Employees who participate in these programs essentially receive free money as their employers often offer matching contributions. The scheme allows employers to set up a pooled investment account that enables employees to access investment products that would otherwise be unavailable to them at advantageous rates. The purpose of these savings is to fund the employees’ retirement or other long-term goals, such as paying for college tuition or purchasing a home. The automated ‘set and forget’ nature of this process makes it easy for people to save by making it habitual and effortless.

Offering a payroll savings scheme can help in attracting and retaining employees. There is promising evidence on the appeal of payroll savings. In 2015 the Chartered Institute of Payroll Professionals showed that 55% of employees aged 16-65 would like their employer to offer such a benefit. Two 2020 Cushon surveys show that 72% of employees surveyed want access to a workplace savings scheme and 92% of employers would like to implement a workplace savings scheme.

GCC countries are embracing reforms to existing employee and expat savings. Arab countries are looking for innovative solutions to make pension systems more sustainable. Thus, the existence of a robust fintech solution, that’s based on the regional needs, for processing recurring monthly savings contributions is a must.

 Group Savings Product that’s Configurable

Fintech Robos is a B2B fintech company providing cutting-edge, white-label technology for savings, investments and pensions. It aims to be part of the solution to the region’s severe and chronic problem of lack of personal and household savings. The company has built the MENA’s first home-grown digital payroll savings product that's available to government, financial and corporate institutions. The solution fills a gap in technologies and applications that allow the provision and digital administration of both employee and contributory savings and pensions (Defined Contribution) schemes.

The solution has been designed for SMEs as well as large corporations and Fintech Robos can efficiently onboard existing or newly founded schemes. The solution is offered on a modular basis depending on the needs of the organisation. The key modules cover scheme administration, onboarding investments, asset management or the full integrated solution. Thanks to its modularity, the group savings product can be tailored and configured on a case-by-case basis.

Thanks also to Fintech Robos’ deep expertise and streamlined processes, the solution has significantly simplified group savings schemes that are often complex and bureaucratic. It has automated all administrative operations of both members’ record management and investments, whilst offering an innovative service to plan members, and allowing personalised educational support and communications.

Whether you are the payroll manager or a staff member in the savings scheme, our UX design has been made intuitive for you allowing easy navigation and use of the interface. Client accounts can be viewed on mobile or desktop, from anywhere and at any time, thanks to Fintech Robos’ multiple financial platforms.

The solution enables heads of payroll and compensation to:

•       automatically administer monthly payroll contributions

•       set and manage contribution levels

•       record withdrawals

•       offer multiple investment options (bank account, bonds and sukook, mutual funds, Reits, etc. conventional or Sharia compliant)

•       administer investment switches

•       report investment performance

•       analyse scheme portfolio

•       generate management and audit reports

 The App is easily and securely integrable with other partners such as banks, life insurance companies and brokers who may distribute regulated savings products, thanks to Fintech Robos’ APIs strategy.