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IWAS AT THE OLD Mutual SuperFund Summit in Durban when the news
of South Africa’s first confirmed case of Covid-19 broke. As I travelled
home to Johannesburg
that evening in early
March 2020, there were two passengers on my flight who were wearing face masks. I remember thinking that they were overreacting. Within a month I was also wearing
a mask, and it felt like the whole world had changed.
Covid-19 has brought massive disruption. What used to be referred to as the new world of work
has become the now
world of work. Like many businesses, Old Mutual Corporate had to adapt very quickly, moving from high-touch, face-to-face engagement with clients to suddenly working remotely and meeting in cyberspace. Many companies have since said that they are unlikely to return to 100% office-based work and we’re relooking how
we will engage with our clients. Some of them have already told us that they will be more than happy to continue working and meeting virtually.
WORK, BUT NOT
AS WE KNEW IT Traditional employee benefits cater very well
to permanently employed staff with a single employer. But the now world of work is going to accelerate
gig work, contract work
and working for several employers at the same time. At Old Mutual Corporate, we’ve been talking internally about our existing B2B2C model (business
to business to client) that
is now becoming C2B2B, where the member is the decision-maker and the employer an intermediary in the relationship. As a result, the line between someone’s employee benefits and
their personal financial planning will blur, and we, as a financial institution, will have to look past those artificial boundaries.
Technology has also accelerated dramatically. There has been a lot
of talk about the fourth industrial revolution
the past few years,
and the circumstances around Covid-19 have only accelerated digital adoption. Again, while digitisation was already part of our strategy, we’re going to have to accelerate it even more.
Another disruption was the way South Africans see micro, small and medium- sized enterprises (SMMEs). We’ve always known that SMMEs have different needs; now it’s become more important than ever that we build solutions
that work for them.
REGULATORY
CHANGES TO
KEEP AN EYE ON
We’re expecting change
to be a feature of 2021
as well. A handful of new retirement-fund regulations have come into effect,
and it’s important that employers and employees understand what they mean. The draft Conduct of Financial Institutions Act and the proposed National Social Security Fund both are on our radar too.
During the past year
or two there has been much market noise around prescribed assets and potential changes
to Regulation 28 of the
Pension Funds Act.
In his Medium-Term Budget Policy Statement in October last year, Finance Minister Tito Mboweni confirmed that retirement-fund trustees ‘are expected to put the interests of retirement- fund members first’, reinforcing their fiduciary responsibilities and role in providing governance and oversight. This was a welcome confirmation as we believe that trustees and suitably skilled, competent investment advisers are best placed to make investment- related decisions on behalf of pension funds.
At the same time Minister Mboweni confirmed a review of Regulation 28 to enable more infrastructure investment. Even under
the current Regulation 28, South African retirement funds are not maxed out in terms of what they
can invest and it will be interesting to see whether a change in the regulation will drive a change in behaviour with regard
to impact investment.
THE NEXT STEPS
The Covid crisis has provided a space for business, labour and government to speak
very openly and frankly about issues. In South Africa there is now greater acknowledgment of
what the state can and cannot deliver, and an understanding that if we’re going to move forward constructively, we all
need to work together. Covid-19 has taught
us a lot about human resilience. We’ve seen how, through moving quickly and adapting to change,
it is possible to come
out stronger on the other side. Although disruptions can make some business models obsolete, they
also create opportunities. The key to spotting them is an open mind and a growth mindset. In a country like South Africa, where there’s so much that can be improved and so many young people who are unemployed, there’s opportunity for huge innovation and growth. We just need to look for it. M
Prabashini Moodley
took over as Managing Director of Old Mutual Corporate in November 2019. Before that she spent 18 years in the financial-services industry, which included a stint as Chief Financial Officer of the Old Mutual
Mass and Foundation Cluster. Her diversified background has
given her a deep understanding of changing customer expectations spurred by innovation
and globalisation.
ISSUE 1 2021 | 31
PHOILTLOU:SGTARLALTOIOINM:AGGAELSL/OGEIMTATYGIEMSA/GETSTY IMAGES. PHOTO: SUPPLIED