As a young boy, Mr Rachidy was a bit of a space boffin, building rockets and the like. But after studying at École Centrale Paris, a postgraduate-level institute of research and higher education in engineering and science, he went into finance, he was offered a lucrative role at Société Générale as a trader.
Despite being in a job where he was not building physical structures, it was a role that allowed him to build a career in finance, while helping members of his family. And this desire to help families is still very much a driver behind what he does.
We want to help the industry provide a solution for people struggling to save for retirementHe set up Abaka in 2016, after being moved by his father’s experience when he was about to retire.
After working 35 years for the same company, Mr Rachidy’s father was left without his full pension – a result, he says, of a lack of financial education and no access to affordable help or financial planning.
“We want to help the industry provide a solution for people struggling to save for retirement or who cannot afford to get access to advice,” he says.
“It’s a huge social and economic problem. Clearly, people are not saving enough, and we are not doing enough as an industry, to help change those behaviours.”
Savings deficit
A study last year by the World Economic Forum found that in the UK, male retirees can expect to live 10.3 years longer than their retirement funds can pay for.
For women, the savings deficit is even greater at 12.6 years more.
With the world facing an unprecedented crisis brought on by Covid-19, it may be more critical than ever for the advice gap to be narrowed.
Mr Rachidy says: “We recognise that the continued access to digital retirement and savings solutions during periods of stress and uncertainty is critical for our clients’ customers.”
Abaka sells its artificial intelligence technology to retirement providers, asset managers, wealth managers and independent financial advisers, to improve the way they can interact with customers, thereby allowing them to reduce some of the costs and fees.
The company helps these businesses to develop an online experience for the customer, while enabling the firm to provide guidance and advice on retirement solutions through an online portal.
Mr Rachidy says: “We need to start the engagement early and it needs to be an ongoing thing, so understanding people’s behaviour and appetite and collecting that information, then creating from that the most impactful messages and sending them a very personalised communication will drive that engagement and activate that customer.”
With the lockdown and working from home policies, he says this is encouraging people to use more digital services.
He adds: “Since retail customers are less likely now to visit a branch or require a face-to-face meeting, providers are keen to understand how digital solutions like ours can help replace these interactions, but also how leveraging machine learning services can help improve both the data and knowledge of their own customers.
“The adoption of digital services enabling customers to access their financial accounts online and to transact and execute from the comfort of their living rooms will only accelerate.”
One of the propositions that Abaka offers is a chatbot, which enables the company to engage with the client in a conversational manner.
“Think of it as an Alexa for your pensions or savings. You can have the chatbot there and basically it will guide you; provide you with education and with advice on your account, self-invested personal pensions, Isa or whatever your goals are.”
When adopted by the client company, the machine learning technology developed by Abaka can analyse the client data provided to determine the kind of information the chatbot will provide, and the type of ongoing information that can be provided to the customers.
With advisory businesses facing threats from larger technology providers, Mr Rachidy claims that Abaka’s offering can help stave off that threat.
He says: “If you are an incumbent today, your fortress is being attacked and the response to that is to have a better understanding of your consumer, a more personalised engagement with the consumer.
“Try to understand their needs and provide them with advice that matters to them at the point when it is needed. For this you need solutions that can do that, through personalised communication, digital advice and through helping people.
“Having a better understanding of what the data footprint of that individual is, means a number of messages and communications are going to resonate with that individual at that point in their life.”
Easing the transfer process
And by automating a lot of the tasks, this is intended to help the company concentrate more on the client. For example, where an adviser wants to transfer a pension from one provider to another, the process of which is still mostly manual, the Abaka technology can digitise the signing and transfer process, reducing time and cost.
Growing up, Mr Rachidy saw first hand how the advice gap problem affected his father; there are many like him who could not then, and still choose not to, talk to an adviser because they cannot afford it.
“So the challenge is, how can we provide that advice so it can be accessible and affordable to the mass market?
“Technology can support that massively and that’s what we are trying to demonstrate at Abaka.”
Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser
