INNOVATION, TECHNOLOGY & THE RETIREMENT INDUSTRY Thank you. And welcome. Over the next hour or so we want to provide you with a couple of views about the potential of innovation in the retirement, health and pensions industries. For that purpose we have assembled an interesting panel of innovators from the insurance, health and technology fields to provoke thought and debate. We have allocated time at the end of our sessions for discussions – so please take note of any questions you have for the end.

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Let me start of with Kate Nazar Kate Nazar has been a pension focused professional for more than 22 years. As a Vice President at Sun Life Financial, she is currently responsible for the overall leadership of the Client Solutions Centre and guiding the seamless delivery of Sun Life’s wealth and protection solutions and services to transitioning group plan members. Kate has spent much of her career directly supporting Defined Contribution and Defined Benefit group plan sponsors and plan members. Our other panelist is Marc Lafleur Marc is passionate that healthcare can work better for all stakeholders. As VP of Insights for the Health Practice at Idea Couture, he brings an ethnographic and empathetic lens to his work in understanding the experiences of disease and care and how the problems of patients, and all those in the healthcare ecosystem can be addressed by better design. Marc has significant experience working with clients across the healthcare space including the pharmaceutical, clinical and public health sectors and manages a team of international researchers with global experience. Trained as a Medical Anthropologist, Marc left academia in order to co-found the health practice at Idea Couture in order to bring design solutions to the problems he was studying.

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I am Scott Wilkinson. In addition to being your moderator today, I am with RPM Technologies. RPM is a Canadian technology firm focused on the wealth, retirement plan and investments industry. RPM provides modern platforms to banks, insurance companies and advisories to increase revenue potential and automation of what are complex retirement, trust and investment products. We help you provide a better experience, at lower costs and do so with less complexity than legacy solutions. We are also a Canadian success story.

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In the next 10 minutes I would like to shape my remarks as the “Paradox of Innovation and Retirement” to help us further explore the opportunities and risks of innovation facing all of us. There are several layers of paradox I would invite you to explore with me: • First, implications of technology use by the older Canadians versus the availability,

and interoperability of services today. • Second, is our corporate view of change and the risks of change versus what is

happening in FinTech today, as an example. • Third, paradox of increased technology reliance, that by nature will focuses on the

value of personal relationships. • Last, we can dangerously narrow technology innovation advantage to the healthy,

affluent and educated… what does innovation mean for the poor, working class and unhealthy? This the paradox of utopia and dystopia in innovation.

Let’s begin.

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FinTech’s describe a range of technology based business models. It is a global trend. The expanse of FinTech offers is profound and confusing. This is all being fuelled by the radical decline of the cost of computing and changes in work culture – including the Gig economy. The average cost of processing and data storage has dropped by 99% since 2000. Terabyte drives that cost millions are now available for $100 at Costco, and Cloud computing suggests even greater scalability. Further the average cost of a start-up is now $100,000 down form millions just a few years ago. These drivers mean more innovation, more opportunity and more competition from exponentially more threats than we have ever seen before.

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The best way I have come up with to contextualize what FinTech means is through the concept of evolution. Definition of Evolution is: The process by which different kinds of living organisms are thought to have developed and diversified from earlier forms during the history of the earth. The gradual development of something, especially from a simple to a more complex form.

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We see this evolution in FinTech. It started with the mainframe era. But modern times started with the Internet. It is going to the Internet of Things and Artificial intelligence. The basis for change is connecting. But in doing so with technologies, interfaces, automated processes to reduce cost, improve service and generate new revenues and business models.

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But we also mean evolution in a messy process of false starts, adaptive survival and the passing of the torch between old and new. Schumpeter called it creative destruction. Change is hard. Particularly for us humans. And it doesn’t care if you have been in business for 100 years or for 1 day.

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How have Canadian companies reacted to FinTech competition? There have been a range of reactions.

• There are a lot of companies pursuing comb-over strategies of trying to look like

FinTechs while not really changing anything.

• There are others looking to acquire the genetics of FinTechs through people strategies, or by acquiring companies themselves.

• Others are confidently standing fast to their principals and models.

• Lastly, there are those that are embracing and incorporating real change into their models

However, not making a choice is not a viable option.

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The fact is the market is changing. Increasingly, the retired population are technically savvy and demanding. They also reflect broader social changes such as multi-culturalism, LGBTQ rights. They are also the single largest, and wealthiest cohort we have ever seen.

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Further, if a call to action on retired market is not enough, let us be very clear that the next game all financial companies have to play is generational wealth transference and relationship/asset retention. But with cultural changes we as financial professional have to adapt to a more plastic interpretation of “family” to service and sell more effectively.

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Lastly, we as an industry needs to address the reality that our offers must increasingly cooperate with a range of solutions surrounding our clients and their care givers. This is a “mash-up” future where providers such as health care, financial services will render data to how the customers need to use it, where they use it. It means that companies pursuing singular proprietary interfaces will find difficulties compared to fintechs who are design focused on needs – rather than self-interest of the company. Those who choose hide behind barriers like compliance will find themselves increasingly isolated from their customers.

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The technology to service retirement community will have to adapt to the changes in our market. Today’s session and our panellists will no doubt speak to the demographic changes in the market. These changes will force a ripple through how we competitively position to service customers, to cost effectively manage their needs, and to do so in an increasingly automated way. Key trends: Mass customization, open standards, inter-operability, advice and fee-for-service flexibility. Also critical to financial firms: Deep understanding of the Canadian and global market requirements, solution scalability, full automation and thoughtful progressive renovation. Coincidently, this is what RPM does for banks, insurance companies and brokerages in Canada.

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Let me leave your with one last paradox. Kodak anticipated and developed the digital Camera. They were the biggest causality of the digital camera industry. They shaped their expectations of the future based on their desires, not on how they could compete with themselves. How many of us are doing the same thing? By the way…. The final impetus for bankruptcy, pensions?… who owns many of the left over operating assets of Kodak? their pension. The pension industry is not a bystander to innovation.

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FinTech is a real, but an evolutionary step … Fuelling existing fires of change The Retirement Industry needs to move fast to reduce costs, legal risks and improve service Understanding how aging investors will interface with you going forward is critical to your strategy The stage now being set, let’s hear from out panel starting with Kate Nazar

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