A platform which uses artificial intelligence (AI) to talk to customers about their retirement and financial wellbeing has been launched by a start-up firm.
The software developed by ABAKA is used in the form of a smartphone application and aims to help customers make better decisions about saving in the workplace.
The product that shares the same name as the company is backed by a number of large financial institutions including BlackRock.
The software's use of AI makes it different from other propositions which use more conventional strategies such as risk profiling and modern portfolio theory to help employees make financial decisions.
These techniques are used by many large benefit consultancies and applied in a workplace environment for corporate clients.
These methods have been challenged by behavioural economics based on research from acclaimed psychologist and Nobel Prize winner Daniel Kahneman.
ABAKA chief executive Fahd Rachidy said: "The way we interact with our finances is undergoing a radical transformation. Individuals are being given increased freedom, which brings with it the increased responsibility of managing their own pensions and savings. That is why AI is extremely powerful because you need to be able to do that at scale.
"AI does three things: it understands, it thinks, it learns, so it understands the user in terms of what you are saying, what it thinks about the appropriate answer and it learns from you but also learns from the large number of users and customers on the platform."
The software is able to adapt and talk with any user at the level required to build a successful relationship. "You can automatically adjust and adapt the language and the level of conversation, the level of engagement and financial education provided. The tone is extremely important and we take great care to do that," added Rachidy.
The product has been tested on a number of individuals in pilot programmes and is marketed solely at employers.
BlackRock is a strategic partner, providing ABAKA with access to a range of selected retirement funds and investment solutions for defined contribution pension funds.
The firm is also backed by investors MMI Holdings, the second largest insurer in South Africa, and Anthemis, a large backer of financial technology start-ups.
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