Speaker 1: Join the conversation. Join the conversation. You're with Kate talk.
Speaker 1: So millions of South Africans are unaware that they have
Speaker 1: insurance or retirement policies that align dormant which have funds
Speaker 1: which are rightfully theirs. It's estimated that there's about ninety
Speaker 1: billion Rand in unclaimed dormant assets in South Africa and
Speaker 1: according to the Financial Sector Conduct Authority Report, the retirement
Speaker 1: industry owes approximately forty eight billion of that to nearly
Speaker 1: four and a half million of US. Around twenty percent
Speaker 1: of the beneficiaries are owed less than one thousand round each,
Speaker 1: which is an amount really too low to justify then
Speaker 1: the cost of tracing. Last year, the company Robin Hood
Speaker 1: Unclaimed Benefits, which is supported by Standard Bank, launched a
Speaker 1: tech enabled solution to tackle this challenge. And I'm joining
Speaker 1: joined on the line via zoom by Robin Hood CEO
Speaker 1: Rowan Gordon. Now, Rowan, good to have you with us
Speaker 1: this afternoon. Tell us a little bit more about the company.
Speaker 1: How did you get started, who's involved and what's the
Speaker 1: purpose of the company.
Speaker 2: Hice, Sir Jan, thanks thanks very much for having me
Speaker 2: on the show today. We started this business a while ago.
Speaker 2: And to a bunch of people that included Michael, you're
Speaker 2: Don and a Philo Remolenisia and myself, and we were
Speaker 2: brainstorming about how we could do something that was meaningful
Speaker 2: for society and do something that was you know, scalable
Speaker 2: and whatever decent sized impact. And when we came across
Speaker 2: the quantum of the problem being ninety billion, I mean,
Speaker 2: it's a phenomenal amount of money and actually stops and
Speaker 2: ponders it for a while. So to try and find
Speaker 2: a solution which could solve this problem, we certainly thought
Speaker 2: that would be something worth mobilizing around.
Speaker 1: We've heard that according to this twenty twenty two report,
Speaker 1: there is an enormous amount of money in unclaimed assets,
Speaker 1: some ninety billion. I mentioned that the retirement industry makes
Speaker 1: up a portion of that. What are some of the
Speaker 1: other industries where these benefits are sitting.
Speaker 2: Jane, So the retirement industry is probably the most tightly
Speaker 2: regulated and that answer is most clearly kind of managed.
Speaker 2: The other industries include unclaimed dividends. There are a range
Speaker 2: of be share schemes. There's all sorts of we're working
Speaker 2: on one matter for the Compensation Commission of Occupational diseases,
Speaker 2: So that's where vast amounts of money have been set
Speaker 2: aside for mine workers who may have picked up injuries
Speaker 2: or disabilities in their working lives. There's a huge amount
Speaker 2: of unclaimed or let's call it unpaid insurance moneys where
Speaker 2: an insurance event has happened and the cash hasn't been
Speaker 2: paid out. There are unclaimed bank accounts, so where people
Speaker 2: are actually in credit and don't know that. So you know,
Speaker 2: the list is vast, and it's long, and if there
Speaker 2: were more kind of strict definitions, I guess that number
Speaker 2: would be substantially bigger than ninety billion in total.
Speaker 1: I mentioned that quite a significant portion of the beneficiaries
Speaker 1: are owed less than one thousand round, which might explain
Speaker 1: how people sort of forget that they are, that they've
Speaker 1: got these policies that they go unclaimed. But that still
Speaker 1: means that there's an awful lot of people for whom
Speaker 1: they probably are owed quite a bit of money. Why
Speaker 1: is that unclaimed and why does it become so difficult
Speaker 1: to trace them?
Speaker 2: So jet part of the plants people don't realize when
Speaker 2: these money is accrue to them. So I mean, as
Speaker 2: a personal example, when my wife stopped working. I mean
Speaker 2: she was I guess, round about thirty, and she didn't
Speaker 2: realize that she would have a retirement benefit attached to
Speaker 2: those few years of employment. So I think many people
Speaker 2: think that this is only kind of blue collar workers
Speaker 2: who've lost contact, and I think is absolutely wrong. I mean,
Speaker 2: there are many many people who don't think about retirement
Speaker 2: when they are younger. And every time people change jobs
Speaker 2: and move between employers, they're probably leaving a small amount
Speaker 2: of retirement funds that's actually rightfully, there is behind and
Speaker 2: if one's not on top of it at that young age,
Speaker 2: you know, these things become lost. You lose contact with
Speaker 2: those old employers, and I guess that's how the thing's
Speaker 2: grown over time.
Speaker 1: And this is sort of where your platform comes in.
Speaker 1: How does it make it easier for people to check
Speaker 1: for their benefits?
Speaker 2: Well, let being start by getting back to the root
Speaker 2: cause of the problem here. So the root cause of
Speaker 2: the problem that there has never been a business model
Speaker 2: in the middle which has enabled anyone to make any
Speaker 2: kind of meaningful investment to try and solve this problem.
Speaker 2: Because there's been a very small amount of technology and
Speaker 2: whenever people were looking for people who are tracing. It's
Speaker 2: a very manual process. It's literally picking up a telephone
Speaker 2: dialing a whole lot of people till you find the
Speaker 2: right per When you do find the right person, you'd
Speaker 2: ask them to hand over a copy of their ID,
Speaker 2: a copy of their banking details, their tax details, their
Speaker 2: maritals certificates, proof of address. So when you are approached
Speaker 2: by someone and they start asking for all this information
Speaker 2: and you don't have much details and why you're handing
Speaker 2: it over, you know, people are naturally skeptical to do that.
Speaker 2: And not only that, but the financial services industry has
Speaker 2: done a super good job about discouraging citizens from just
Speaker 2: engaging with people who promising a pot of gold. So
Speaker 2: you've got this problem that it's a very manual process
Speaker 2: where there's a high propensity for fraud and scamming, and
Speaker 2: people have been educated not to engage with people. So
Speaker 2: you know that all of that needs to have a
Speaker 2: fundamentally different solution, and this is where you know, we
Speaker 2: discovered some alternatives. So the first thing we said is
Speaker 2: that any person who has access to a financial asset,
Speaker 2: so that's an unclammed dividend and insurance policy, a pension fund,
Speaker 2: it is highly likely and I'm restricting it here to
Speaker 2: living South African citizens, but if you have access to
Speaker 2: a financial asset, it's highly likely that you have a
Speaker 2: bank account. So what we've done here, and the question
Speaker 2: you ask is how have we solved the problem? We've
Speaker 2: done two things. One is that we've actually gone to
Speaker 2: the retail banking industry and we've worked with the retail
Speaker 2: banking industry to aggregate that banking information. So if for instance,
Speaker 2: you were with insurer A and you had a benefit
Speaker 2: that was due to you, we would then take this
Speaker 2: list of benefits from the insurer and we'd go across
Speaker 2: to the banking industry and say do you bank at
Speaker 2: Bank A or Bank B or at Bank C, And
Speaker 2: when we find you, we have the ability to reunite
Speaker 2: you with that money. So that is the first thing,
Speaker 2: and we call that straight through processing, and we're able
Speaker 2: to do that on smaller amounts where there's a limited
Speaker 2: financial risk in the system. So we're dealing with amounts
Speaker 2: that are less than twenty thousand grand any particular transaction,
Speaker 2: you know, one can set about directly paying these amounts
Speaker 2: back into people's bank accounts. The second thing we did
Speaker 2: then was we created a smooth banking app where people
Speaker 2: can engage and this is really for the bigger amounts
Speaker 2: where through the app we'd want to gather additional information
Speaker 2: to confirm security issues. So nowadays, when you engage with
Speaker 2: your banking app, you literally look at your phone, the
Speaker 2: phone recognizes you. You know, we have the ability through
Speaker 2: the digital portal of the phone to collect additional information.
Speaker 2: We can ask you to take a selfie, you can
Speaker 2: triangulate that with home affairs information, and you can get
Speaker 2: additional documents that people can take photographs of and you
Speaker 2: can scan them all in and you can compete your
Speaker 2: administrative processes very quickly on the app, which then facilitates
Speaker 2: the payments. So those in essence, just to summarize, those
Speaker 2: were the two learnings in this process. One is going
Speaker 2: new the retail banking industry and the second thing is
Speaker 2: going to invest in a proper bit of technology in
Speaker 2: the form of an app that can help digitize this
Speaker 2: whole process.
Speaker 1: I mentioned in the introduction that you are working with
Speaker 1: Standard Bank. How does how does that help specifically, Well, you.
Speaker 2: Can imagine now so here we have a bright idea
Speaker 2: to go and tackle a ninety billion round problem. You know,
Speaker 2: It certainly was helpful that when we went and explained
Speaker 2: the art of the possible to stand a bank to
Speaker 2: have a big brand associated with our activities here. And
Speaker 2: so you know, one of the super useful things that
Speaker 2: the bank did was that took us straight to National Treasury.
Speaker 2: We went to the regulators. We went to explain what
Speaker 2: the ideas were in the solution. And first it is
Speaker 2: to try and confirm that we were doing things that
Speaker 2: were supported by a national treasury. So I know that
Speaker 2: National Treasury has been very busy trying to deal with
Speaker 2: the unclaimed benefits problem themselves, and we wanted to make
Speaker 2: sure that we were working against anything that they were
Speaker 2: trying to do. So that is a super helpful thing.
Speaker 2: And then the second thing is that certainly we've been
Speaker 2: through let's call it bank grade scrutiny in terms of
Speaker 2: setting up all the systems, looking at data security and
Speaker 2: making sure that everything's poppy compliant and you know, really
Speaker 2: closing off all the questions that should be asked of
Speaker 2: a normal kind of startup company.
Speaker 1: I wonder the age of some of these some of
Speaker 1: these benefits, I mean, how long are we talking that
Speaker 1: people are sitting there unbeknownst to them with funds in
Speaker 1: their name.
Speaker 2: Look that you're going to get the full spectrum there.
Speaker 2: I mean, they're going to be some really old people
Speaker 2: and they're gonna be some really young people. So are
Speaker 2: there are many And the problem actually arises often in
Speaker 2: younger people. So it arises in the context of people
Speaker 2: aren't aware of the fact that they've accrued these benefits.
Speaker 2: It might only be then when you get to your
Speaker 2: fifties and sixties when you start thinking about retire, meant
Speaker 2: that you you know, you go and think about, you know,
Speaker 2: where you may have worked in that So the source
Speaker 2: of the problem in the message of the young people listening.
Speaker 2: Every time you change jobs and you do these things,
Speaker 2: there are financial benefits accruing to one as one journeys
Speaker 2: through life.
Speaker 1: I know that Liberty Life has been one of the
Speaker 1: first major firms to adoptor Robin Hood any other big
Speaker 1: names that who were on.
Speaker 2: Board, I mean, without singling out particular people, without leaving
Speaker 2: out other people. We're dealing with a media twenty four
Speaker 2: b E scheme which has been hugely successful, where the
Speaker 2: recipients were due money. I mean, a lot of the
Speaker 2: moneys are not substantial individually, and that in its wealth,
Speaker 2: has made it harder for the industry to go and
Speaker 2: trace people. So to go through very manual processes to
Speaker 2: try and pay out small amounts of money, it's virtually
Speaker 2: economically suboptimized or impossible. And another solution of doing it
Speaker 2: digitally and doing it quicker and easier, has made it
Speaker 2: much cheaper, so that we could even pay out a
Speaker 2: twenty rand payment. I mean literally, if you do twenty
Speaker 2: rand a new bank at stand a bank, I can
Speaker 2: put the money back into your bank account. And it's
Speaker 2: really a low friction, low cost solution that's really going
Speaker 2: a long way to mop up a lot of the
Speaker 2: old edmund that's clogging up the system. Yeah.
Speaker 1: Well you did mention Rowan that young people ought to
Speaker 1: be really aware, and I consider myself one of those
Speaker 1: young people, she said, tongue firmly in cheek. And so
Speaker 1: while we were while we were speaking, just then I
Speaker 1: went to robinhood dot org dot ZD popped my ID number. Sorry, SJ,
Speaker 1: we found no benefits. Well I'll keep trying. I'll keep
Speaker 1: trying because you never know. You never know what worked,
Speaker 1: where where they might be hiding, what information does somebody
Speaker 1: need then, as I've just done it, it literally took me
Speaker 1: five seconds while we were having a chat just to
Speaker 1: go and put my my details in. If there are
Speaker 1: funds to be paid out, how does that process get done?
Speaker 2: Basically, what happens through this process. First of all, we
Speaker 2: have to go and sign up the asset holders. So
Speaker 2: this example, you mentioned Liberty Life. If you had a
Speaker 2: benefit at Liberty Life and we'd sign up Liberty Life,
Speaker 2: that should be ingested into our process. So when you
Speaker 2: came and inquired whether there's anything that was due to you,
Speaker 2: if you weren't at Liberty Life, then you get a
Speaker 2: zero return. But every day we are running around actively
Speaker 2: trying to sign up additional asset holders. We're in discussions
Speaker 2: with sunlemon Old, Mutual and Momentum and Alexander Forbes. So
Speaker 2: we are trying hard to aggregate all that information. And
Speaker 2: as we grow that base of information, people are going
Speaker 2: to have deeper, deeper success rates. And literally all one
Speaker 2: needs to do is to put in an ID number.
Speaker 2: You know, you go to the site, you put in
Speaker 2: your ID number and you will get a response, and
Speaker 2: if you do have a benef for due to you,
Speaker 2: there'll be a more thorough kind of sign up process
Speaker 2: where you do you have to take a selfie and
Speaker 2: a picture of your ID and it'll go through a
Speaker 2: verification process.
Speaker 1: Robin, it's been wonderful to have you on the show
Speaker 1: this afternoon. Appreciate Robin Rowan of Robinhood. I'm so sorry, Rowan,
Speaker 1: that must be that I can't have been the first
Speaker 1: person to do that. Roman, If i am, I'm mortified.
Speaker 1: Rowan Gordon is the CEO of Robinhood and do find
Speaker 1: yourself on the website. It is robinhood dot org, dot
Speaker 1: z A and just pop your ID number in