Aviva is upgrading Navigator Investment Services, a Singapore-based platform for independent financial advisors, into a digital service to provide pensions and investments to a broader array of and intermediaries.
Chris Wei, global chairman of Aviva Digital and executive chairman of its Asian business, says the U.K.-based insurance company is refurbishing Navigator and DollarDex, which sells mutual funds directly to Singaporean retail customers for zero commissions.
“We want to make the process seamless,” Wei told DigFin, noting that Aviva Digital’s engineers have put the two businesses on the same back end administrative platform, and are now focused on things like customer experience.
“We see this as being comparable to Nutmeg or Wealthify,” Wei said, referencing two British online investment-management services. Although there is still today paper involved in some aspects of the business, the company is working to eliminate those, spurred by the Singapore government’s efforts to develop digital identities for citizens. This changes the economics of business models based on selling advice rather than on product.
Giving digital a focus
At the start of 2016, Aviva decided to set up a separate entity, Aviva Digital, to drive change. Wei runs this globally, as well as the Singapore business. Before joining Aviva Digital, Wei was CEO at Great Eastern Life Insurance, a unit of OCBC Bank, where he played a role in developing a digital strategy.
Unlike many other insurers embedding innovation within the core organization, Aviva decided that relying on country- and product-level CEOs wouldn’t yield dramatic results. Instead it established a separate legal entity, with its own budget, to drive digital innovation, M&A and partnerships, with Wei reporting to Aviva’s global CEO, Mark Wilson, and the board of directors. Aviva Digital established Singapore as a second hub, after London, and set up a separate office arranged around agile business practices.
Although some projects focus on Aviva’s insurance business, Wei says the focus in Singapore has been on the Navigator business, which is designed to be used by IFAs and their retail customers to build a portfolio based on an advisor’s recommendations. The platform carries 620 products from a variety of mutual-fund companies; Navigator links to fund managers via Calastone, a vendor that facilitates interoperability among fund houses and distributors.
The Navigator business was first launched in 2002, but has roots in Australia that go back to the 1990s. Its main competitor is Hong Kong-based iFAST Financial. Neither business has achieved scale because, as in most Asian markets, independent financial advisors have struggled to sell advice rather than push products; banks are the primary distributor of retail funds.
“Navigator has been a small part of Aviva,” says Warwick Young, Navigator’s CEO, in an earlier interview with DigFin. “Financial-advisory platforms were always starved of capital and struggled to recruit against tied-agency distributors.”
But tied-agency models only offer a narrow product set, whereas consumers in Singapore want more choice, and technology makes multi-product sales more cost-effective; for example, DollarDex now accepts investments as low as S$100. With the creation of Aviva Digital, Navigator has also been given more independence and a bigger budget.
“We’re giving Navigator a real shot with its own management team,” Young told DigFin. He acknowledges it is difficult moving a business to a new digital footing, which is one reason why Navigator was moved into Aviva’s ‘digital garage’. Beyond the technology upgrades and functionality that Navigator has built, the business is being repositioned around data, from compliance to product recommendations. Young says one challenge is linking it to third parties, notably the financial advisors themselves, who need to use the system to make it worthwhile.
“Getting individuals to agree to use one system and stick to it is hard,” Young said. “It can be like herding cats.” But the advantages will become clear as the government makes it easier for people to release information digitally. “It’s early days but I have a lot of hope for that,” Young said.
Wei says the decision to revamp Navigator as well as the smaller DollarDex business also reflect a changing customer base. “We want to attract well educated, savvy investors who want to get into the game,” he said.
So is it working? Wei declined to discuss numbers such as revenue or new customers. “We track the data every day,” he said. “We look at things like visits and bounce rates.” The digital company is still building data teams and training its actuaries to use new sources of information to run statistical analyses. “Aviva is 321 years old, and stability and heritage still matter to a life insurance company,” Wei said. “But we also know we have to disrupt ourselves.”