Pension administration, innovation & technologies
Technology is a wonderful thing when it works, but when it doesn’t it becomes painful. What role does technology have to play in pensions administration? A major part is the obvious answer. Examples put forward by many providers, consultants and communication specialists will sing the praises of technology, however there is a but coming…
The focus on technology in the pensions media, and on providers’ websites, has been on the value adding side of pensions. We have seen Amazon Alexa being used to provide fund values; a nice gimmick. We have augmented reality with images being scanned to reveal videos about your pension. And then there is gamification; people wearing strange looking face masks that take them into a virtual world where they can see what their projected pension will buy them in the future. A change in contribution rate could change the cup of tea to a glass of fizz, or the Mini to a Lamborghini.
This is the sexy, exciting side of technology and pensions but what about the back office? Pensions administration is about maintaining member records, calculating benefits and paying them out or transferring them somewhere else to be paid out. What role does technology have here? Blockchain has been touted as the future for pensions administration but its adoption has been virtually non-existent. Perhaps it isn’t suited to the relatively small number of transactions schemes and providers do in the traditional sense. It may only really take off in much larger scale operations, for insurers, investment houses or when/ if we see the consolidator schemes emerge.
What is happening which is more useful to administration is the use of common standards.
This is key in data exchange, whether it is for the now possibly defunct pensions dashboard, or, for example, to de-risking modelling tools, or from Auto-Enrolment assessment software. Being able to transmit data between pensions administration platforms and supporting systems is not new, it has been desirable for a long time. But now it is happening under common standards.
Alongside data transmission, we have seen data analysis and cleanse tools come on in leaps and bounds.
By firstly having clean and accurate data, we can then make use of the fancier tools the industry is excited about. Clean data lends itself to technological developments. The use of Artificial Intelligence (AI) or robots, is already creeping into administration. Why have workflow driven administration when you can have robotics doing all the hard bits for you?
The use of tools to understand big data also helps pension administration. Schemes are keen to understand the data to help engage and communicate with members better, i.e. segmenting members and being able to personalise messages to them. For administrators it helps with planning from resource allocation through to meeting training needs of the teams. And, because I had a cheap dig at Alexa, I do believe it has a role to play in pensions. We may see its use in administration teams, replacing online scheme bibles as a source of scheme specific knowledge: “Alexa, what are the rules for... scheme from ABC Before 2008, who are now active in the Defined Contribution section?”
Last update: 21 July 2020
Salary: £20000 - £30000 pa
Salary: £20000 - £30000 pa
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Location: Reading, Berkshire