PinBox pushes to bring more global workers into retirement savings tent

Gautam Bhardwaj is aiming to get 100 million workers in the informal sectors of India's economy — from Uber drivers to farmers to domestic servants — to start saving for retirement over the next five years.

For the co-founder and director of Singapore-based pension-tech provider pinBox Solutions Pte. Ltd., that amounts to a quick pivot from an initial success in Rwanda — where in close collaboration with the government, pinBox helped 1.5 million informal sector workers, a quarter of that country's workforce, save a combined 20 billion Rwandan francs ($19 million) over the past three years — to take on a far bigger and more complicated challenge.

PinBox, launched in 2016, looks to build on the progress emerging markets have made in promoting digital finance and close to universal mobile phone penetration by providing the technical "glue," in the form of application programming interface software, that can make that digital infrastructure function as an "ecosystem" for informal sector retirement savings.

"What we do is use technology and technical assistance to help people, governments, countries, regulators, mainstream financial institutions to set up inclusive pension arrangements," Mr. Bhardwaj said. The company's goal is to allow any country "to switch on a national level pension program for informal workers within a few weeks, and with near-zero capital investment," he added.

Meanwhile, pinBox in July raised its first $1 million from Mumbai-based investor Venture Catalysts Private Ltd. after avoiding raising money for the first five years out of concerns the team would come under pressure to focus on revenues before it had set a strong enough foundation for commercial sustainability.

Two additional potential partners could bring the total raised to $3 million by the end of the year, Mr. Bhardwaj said. He declined to name them.

Mr. Bhardwaj said that, after "working figuratively out of a garage" for the past five years, the funds raised should give pinBox room to bolster both its technology and its client-facing team, he said.

He said pinBox's own employee rolls will jump to 35 or more by mid-2022 — including an eight-member pension advocacy and global advisory team, a 12 to 14 member pension team in India and an in-house information technology team of between 15 and 18 members — from just five pension sector experts a year before. PinBox had previously relied on an outsourced nine-member information technology team and four outside global consultants.

Retirement industry analysts say the company could be making its push at a fortuitous moment in time.

"Living life via apps is already native to most, so it is welcome to see solutions like pinBox coming to market," said Ashley J. Palmer, Hong Kong-based regional head of retirement with Aon plc.

"I expect to see high takeup, too, from formal employment sector workers in such app-based solutions if they are both fit-for-purpose and integrated into daily living, e.g. rounding up change into savings," Mr. Palmer said. "The pandemic has sped up contactless spending so it's good timing to accelerate friction-free savings for all, too."

Mr. Bhardwaj and his co-founder, Parul Seth Khanna, said in a recent interview that while only 10% of workers in most emerging market countries are in formal sectors of the economy offering retirement plans, perhaps 50% or more toiling in informal sectors are able to save for retirement, if irregularly.

For that large swath of the workforce, "the challenge is not the capability to save. The problems are more on the supply end," Mr. Bhardwaj said. "If I'm an Uber driver, I can't save maybe $200 in one go," but if that same driver could save a couple of dollars a day when the opportunity arises, it would make saving for retirement easier, he said.

For some partners, whether public or private, pinBox will serve as "an enterprise solution, where we provide our technology," effectively a software as a service model, with the firm's team managing the back end and providing technical assistance, Ms. Khanna said.

PinBox, meanwhile, is working on four delivery models now for India, Mr. Bhardwaj said.

One is an "embedded model" for gig platform companies, where pinBox embeds its pension tech interface on workers' apps so they can simply "punch a button on their own app and set up a pension account," making regular contributions thereafter.

"So if you're a fintech or if you're an agri-tech or whatever, we're happy to white-label the thing and give you a button on your app, which allows your constituency to set up and manage pension accounts," Mr. Bhardwaj said.

For the second model, pinBox works with "aggregator partners," such as women's or farm cooperatives, effectively a business-to-business-to-consumer model.

The third model is pinBox's "gift a pension" program where, for example, a family with a live-in maid could help her set up a retirement account and offer matching contributions.

Mr. Bhardwaj said while that "gift a pension" offering has just gone live in India, pinBox is also talking to potential partners in Singapore to launch a similar program there for the 300,000 to 400,000 domestic helpers employed in the city-state.

"There is a need for these women … to start saving because most of the higher income that they're generating while they're temporarily in Singapore is really resulting in a temporary jump in consumption for their families back home," rather than any savings, he said.

Finally, the fourth delivery method for India is a "direct to citizen" model, relying on a global partnership pinBox forged with WhatsApp allowing any of the 500 million people in India using WhatsApp today to set up a retirement account on the app within minutes, Mr. Bhardwaj said.

If the company hopes to get 100 million Indian workers on the path of retirement savings within five years, its ambitions remain global. Mr. Bhardwaj predicted pinBox's growing capacity to engage with a greater number of countries could bring roughly 50 million more workers onto that path as well over the same period.

"To a certain extent, we've been able to solve the problem on ... the mechanics" of saving for retirement in these countries, like making it easy and simple for a woman in a remote village in Kenya — where a pinBox program just went live this year — to use her mobile phone to open a "national ID-linked, digital micro-pension account and start putting aside half a dollar a day at minimum transaction costs," he said.

Still, a lot of work remains to be done in the area of behavioral psychology, Mr. Bhardwaj conceded. "How do we motivate a 19-year-old in Kenya to actually think about retirement at the age of 19? How can we ensure that she continues to save regularly month after month, and year after year," he asked.

Meanwhile, said Aon's Mr. Palmer, companies like pinBox will face the same "balancing act" as other retirement programs in providing savers some access to their savings for emergencies vs. ensuring money is put aside for the future.

"Within this ecosystem, there is also a key role for affordable and adequate insurance solutions to provide protection benefits which act to avoid ... erosion of retirement savings," Mr. Palmer said.

Mr. Bhardwaj said his company's answer to that challenge, in India and Kenya, has been to dedicate roughly half of workers' contributions to illiquid retirement savings products while putting 40% in liquid products from which "you can withdraw and no questions asked," and then roughly 10% in an insurance bucket which covers "lifecycle risks." That sort of flexibility, he noted, makes "the illiquid part" of the program much more acceptable for a lot of people.

For now, pinBox could be the only company working to solve the problem of retirement savings for informal sector workers across different countries, but to the extent the company enjoys success, others are likely to jump in and that will be all for the good, Mr. Bhardwaj said.

"There's no way that one company can solve the problem," he said.