Over the years, technology has revolutionized our world and influenced our daily lives. In the MPF world, significant resources have been invested in Fintech development to improve the efficiency of administration and members’ user experience.
In this regard, the MPFA is gearing up for the introduction of the eMPF. The Legislative Council passed the necessary amendment bill in October 2021 which provided the legal basis to facilitate the implementation of the eMPF platform. When the eMPF officially launches, members will see how Fintech can enhance their MPF experience further.
One of the objectives of implementing the eMPF is to centralize MPF administration for all providers. For MPF members, it means they will soon be able to manage their different MPF accounts through their computer, tablet or mobile phone. For employers, the eMPF will allow them to make contributions to any MPF provider via the platform. By standardizing administration processes, it will increase the overall efficiency of the MPF system and will reduce the administrative expenses. The intention is that the savings achieved will directly lower management fees, which will benefit all members.
In addition, the eMPF will include other features to enhance members’ user experience. For example, it will allow the integration of contribution and balance records of multiple providers’ schemes. Members will be able to have a comprehensive view of their overall MPF savings, which will help when considering asset allocation and also personal account consolidation.
Fintech is often connected with ground-breaking technology, such as cryptocurrency and blockchain. More broadly, Fintech refers to any emerging technology that improves the efficiency of financial services transactions. In the past, transferring money or paying bills could only be done at the bank counter or using an ATM. Nowadays, these tasks can be completed on the same day through e-banking or using a mobile app. These are examples of Fintech, and many people are enjoying the convenience that Fintech brings to our daily lives.
Here are some predictions on how Fintech may be applied in the context of eMPF.
One of the possible functions of integrating Fintech into the eMPF platform is to provide members with asset allocation advice, or “Robo advice” in Fintech terminology. After entering information, such as age, income, family status, and other retirement savings, etc, the robo-advisor will assimilate the above information with the member’s MPF balance and current fund allocation, and provide automated asset allocation advice based on the member’s risk appetite and saving objectives. This will be a useful function for members who are inexperienced in investing. Currently, the DIS fund only adjusts the fund allocation based on a member’s age. By contrast, the robo-advice will be more personal and is based on each member’s personal needs.
Another possible Fintech application in customer service is Robochat. Members can communicate with the Robochat through their computer or mobile phone at any time. Unlike the Interactive Voice Response (IVR) service, in which you may fail access the correct information after entering multiple commands.
A mature Robochat can conduct human-like two-way dialogue, instead of only based on scripted conversations, to understand members’ inquiries accurately and provide information accordingly, such as the account balance and investment portfolio status, and even allow members to instantly reallocate their assets or withdraw previous instructions, without having to access multiple interfaces. Since the Chatbot is not staffed, it can provide services around the clock, thereby reducing the restrictions and inconvenience faced by members in managing their MPF portfolio.
The application of Fintech within eMPF involves challenges such as data privacy and network security, and therefore requires more advance encryption technology. In addition, some MPF members are less familiar with digital technology, and so a transition period is needed to allow these members to continue to handle MPF account matters in the traditional way, whilst they also hopefully become more comfortable with the new technology.
As technology evolves, the MPF system will need to keep pace with the times to provide all MPF members a better overall experience.
This article in English and Chinese is available for download.
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