AFP Confía joins the experience economy with customer engagement tech

'Since the 2017 pension reform, engagement is rising… but we have 1.5 million customers, so rising engagement is a challenge,' says Risk Director Kelvin Mejía

December 3, 2019

In the first half of this interview, AFP Confía CEO Lourdes Arévalo and board member Robert Vinelli discussed El Savlador’s 2017 pension reforms, and the big picture for Confía’s next five years. In this video, Investment Director Rafael Castellanos and Risk Director Kelvin Mejía explain how the region’s largest pension fund is embracing new technology to more effectively and efficiently engage with its 1.5 million customers.

World Finance: Rafael, we’ve heard about the big picture for AFP Confía; now tell me about your team and your processes. How do you ensure excellent performance?

Rafael Castellanos: Well our team is composed of young but very experienced individuals. Our portfolios are mainly in fixed income securities, and we’ve helped develop the Central American region and El Salvador’s industries through investing in municipal projects: water utilities, electricity, port and airport expansions, and a variety of different industries.

Throughout the years our team has also been a pioneer in regionalising our portfolios through investing in Costa Rica and Panama; a little over $500m in the last few years. With that, and the diversification of our portfolio, we’ve been able to achieve number one performance in the industry.

World Finance: Now Kelvin, you’re currently re-engineering your processes to make better use of technology and automation; tell me more.

Kelvin Mejía: Well, with this re-engineering, we want to guarantee that our customers are our primary focus. We’re using big data analysis and machine learning tools in order to help us be closer to our clients, but resolve their problems remotely.

For instance – Rafael and their team are using Python, R, and Power BI tools to resolve everyday problems within their investment processes. Such tools I think will help us raise awareness of the pension system, help our clients to know their returns in their portfolios, and also to highlight and communicate the advantage of voluntary saving for their retirement.

World Finance: And what changes have you seen in customer engagement or savings rates since you’ve been developing this stronger dialogue with your customers?

Kelvin Mejía: Well, since 2017 pension reform, engagement is rising. Nowadays our customers have new benefits, such as partial withdrawals, which is a huge improvement to our system. So engagement is rising.

But being the biggest pension fund in Central America and the Caribbean means that we have 1.5 million customers – more than 50,000 pensioneers – so rising engagement is actually a challenge. But Confía is stepping up to that challenge, and we’re doing it through technology. Nowadays we’re using biometric identifications to our customers, we’re using self-service stations and artificial intelligence for WhatsApp.

So finally, I think that the engagement will still increase in the following years, because at the end of this year we’re submitting to our local regulator an application for a new, voluntary, savings fund. So that will be a new challenge for us, in order to help our customers to have the best pension that they deserve.

World Finance: And Rafael, how has the investment team been empowered by the new tools that Kelvin mentioned?

Rafael Castellanos: Yeah – in order to find solutions through innovations, we’ve challenged our team to look for everyday processes that can be simplified and done a lot quicker.

Being able to manipulate big data has expanded our horizons; and at the same time we’re able to use data-led approaches to find solutions without having to depend on IT specialists or data scientists.

We’re being able to do this now in a few days or maybe a day, rather than weeks.

World Finance: So getting even closer to the voice of the customer. Rafael, Kelvin, thank you both so much.

Rafael Castellanos: Thank you, Paul

Kelvin Mejía: Thank you.