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