I was at the Old Mutual SuperFund Summit in Durban when the news broke of South Africa’s first confirmed case of Covid-19. 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 digitalisation 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 are on the cards, and it’s important that employers and employees understand what they mean. Mandatory preservation, provident fund annuitisation, the draft Conduct of Financial Institutions Act and the proposed National Social Security Fund all are on our radar.

During the past year or two there has been a lot of 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 2020, 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 is 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 movin quickly and adapting to change, it is possible to come out strongly 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.

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