23 January 2019
In the wake of the December publication of the Department for Work and Pension's (DWP) feasibility study on pensions dashboards, Finance Edge hosted a webinar looking at how the industry moves forward to design and implementation.
Finance Edge’s Marie Walker was joined by:
• Richard Howells, Director of Insurance, Wealth, Life and Pensions, UK & Ireland, Experian
• Rod Bryson, Director of Wealth, Long term Savings & Insurance, CapGemini
• Michael Lightfoot, Group Business director, Aquila, an Equiniti company
• Peter Mann, former chief exec Scandia and vice chairman Old Mutual; now holds a number of non-executive director and consultancy roles
This article offers an edited summary of the conversation.
What needs to happen in 2019 to drive this forwards?
There was a general consensus on the need to build and maintain momentum. A target of end-June to complete partner selection was suggested, so that the build can begin this year for delivery in 2020.
The industry needs to come together to support the SFGB, with a clear vision of what we are trying to achieve and by when.
What opportunities does the multiple dashboards route offer?
While the December paper clearly expressed the need for a SFGB dashboard as a default option, experience from other jurisdictions shows that multiple dashboards give a positive outcome.
Multiple dashboards offer consumer choice, and the opportunity for providers to differentiate their digital client experience. That promises both to create more engaged consumers, and to spur innovation and competition.
Is a single pension finder service (PFS) the right answer?
A single PFS is the right answer, at least initially. It helps keep the model simple, and offers consistent and reliable service delivery.
But there are risks, and it may make sense to review this later on. The stability and reliability of a single PFS will be crucial – dashboard downtime due to inadequate PFS performance would significantly damage user numbers.
How can security be balanced with usability?
Security is key. Not least, any consumer fear about data security needs to be removed. But equally, an overly complex sign-on process will be self-defeating.
Examples like online banking, HMRC and existing pension provider procedures offer useful benchmarks. Thorough user testing should help deliver an intuitive customers experience.
Detailed issues to consider include the level of authentication, whether to have more than one identity provider, and how the dashboard digital ID should link with other services. This is just one of the design topics that need to be agreed quickly.
How can we drive voluntary adoption and what advantages will there be for first movers?
Consumer-centric pension providers should be able to see the enormous advantages on offer. Being able to help customers make informed decisions builds trust. If that leads to pension consolidation, we’re looking at a swing of embedded value worth tens or hundreds of millions.
Forward-thinking organisations should be looking to get involved – before members start asking whey their scheme isn’t on the dashboard when some of their other pensions are.
Experian consumer research offers a concrete reason to become a first mover. Once a customer is happy with the services from a dashboard, they are unlikely to switch to another.
In terms of making it happen, broad engagement across the industry will help drive adoption. The goal is to ensure that software providers and large scale administrators commit to being ‘dashboard-ready’ in 2019.
At the other end of the equation, the benefits of understanding total pension value should be promoted to consumers. The aim should be to develop a culture of enquiry, with a clear referral mechanism for those customers who want further engagement.
What could derail the project?
Overcomplication or reinvention – whether by SFGB or others – are primary concerns. There will be fine-tuning, but we’re not starting from scratch. It’s up to the industry to make this happen. Indecision or an inability to agree to the basic design are real threats.
While the introduction of SFGB makes sense, the industry needs to work out how best to work with this new entity.
Specific issues that need to be addressed include data quality across the pensions sector and poor customer engagement.
Should we aim for simplicity or a more engaging experience?
The first version of the dashboard needs to provide the basic information clients need. The financial services market is scattered with failed projects where the best experience was created but simply took too long to develop and launch.
But driving repeat usage will require more than static information. The dashboard can be future-proofed, with an open architecture that is exposed via industry-standard APIs. Consumers need to be made aware of the roadmap for future developments.
Follow @Finance_Edge for more updates and commentary throughout the year.