Pensions dashboard - is the industry ready?

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Pensions dashboard - is the industry ready?

The answer, according to some respondents to this guide, is yes. For some, it is no. For Andy Kirby, founder of The Pensions Portal, it is “both yes and no”.

But before exploring why opinions differ on pensions dashboard readiness, what exactly is the dashboard?

In a nutshell, it is a place where consumers can log on and view all their pension pots on one place. It sounds like something that, given all the technological advances over the past decades, should have and could have been done before. 

Philip Brown, head of policy at LV=, describes the dashboard as “a much-needed piece of technology that will give consumers a clear understanding of all their pensions in one place, and could help them take action to lead more comfortable lives in retirement".

The industry is ready for the concept of the dashboard, but I am not convinced the industry is ready to support the technology required . John Kelly

Mr Brown comments: "It will use information that is already being shared with advisers electronically in a matter of moments, so although this is a sizeable project, it is the next logical step for the industry in enabling consumers to manage their retirement savings."

However, he adds it will only be of utmost effect and use to consumers if all the providers and schemes sign up.

Mr Brown adds: “It is also vital government makes it compulsory for providers and schemes to take part if participation is slow, as without widespread take up, the dashboard will not benefit as many of the consumers it has the capacity to help.”

Ready? Aye, ready

Yes, the industry is ready in that it understand what the dashboard is, what it will achieve, and it is prepared for the possibilities it offers for long-term pension planning.

As Richard Nuttall, head of compliance policy for SimplyBiz comments: "We believe the industry is more than ready for the dashboard. Theoretically.”

He explains the industry is already au fait with how the dashboard will work in principle and what is needed to make it work.

“A dashboard will pull verified information into one central hub and should be much easier for both clients and advisers,” he states.

And yes, the industry has already taken great strides in terms of developing platforms and engaging with customers and advisers.

Rob Yuille, head of retirement policy for the Association of British Insurers (ABI), the trade body spearheading the development of the pensions dashboard, says providers are “taking an active approach to tackling the challenges which need to be overcome”.

He explains: “Many firms, insurers and others, already use an array of digital platforms to communicate with consumers and their financial advisers, although these operate in silos and can only show consumers a partial picture of their future retirement income.”

For this reason, Mr Yuille adds: “A real value of the dashboard network is to act as the bridge between these tools and provide a holistic picture of customers’ retirement income.”

This all looks good, given that pension dashboard services – the means by which individuals will be able to see all their pension pots at a glance – will need to be live in 2019.

Not ready

The answer to whether the industry is ready is also no, however. There are several reasons for this. 

For Mr Kirby, the reason he does not think the industry is ready is that not all providers have their policyholder’s data in a “shape compatible with supplying the dashboard”.

The reason for this, says Mr Yuille, is: “Not all the pensions sector has embraced digital technology.

“For these firms, the challenge to incorporate their systems will be greater, but not insurmountable. The prototype dashboard includes services that act as intermediaries between those with older legacy systems and modern web interfaces, converting data in whatever form to a common dashboard language.”

This means many pension schemes, providers and even advisory firms will need to get their technological house in order. 

John Kelly, consultant at Mattioli Woods, puts it this way: "The industry is ready for the concept of the dashboard, but I am not convinced the industry is ready to support the technology required to ensure that fully complete and meaningful information is available to clients at launch."

But Mr Kirby believes providers are getting there, and says “yes” some providers are ready now. He adds: “The government has adopted a pragmatic approach, implementing a 2019 launch date, which is appropriate for the complex pension landscape in the UK market.”

Is the dashboard ready for the industry?

The ‘theoretical readiness’ alluded to earlier by Mr Nuttall is just that: theory, because the job in hand of developing the dashboard is enormous and it is not just the systems and the technology of the industry that need to be perfected. 

For Mr Nuttall, the biggest reason for a lack of readiness so far is largely because the industry has not got one ready to trial with real data. 

He says: “A lot of work has gone into the processes behind the dashboard and running test data. But data protection regulation has so far prevented any dry-runs with real, live data.

“Also, the algorithms behind the dashboard will need to draw together a great deal of complex and far-reaching data, and it is absolutely essential that consumer trust in the accuracy of the system is maintained.

“So the industry is more than ready for the dashboard; it is vital the dashboard is 100 per cent ready for the industry before launch in 2019.”

Progress to date

There has been some positive progress. In March, the Pensions Dashboard Project reported good feedback after the prototype demonstrations, which was hailed as a success by the ABI.

Paul Pettitt, managing director of Origo, said at the time the prototype had been received with a “wave of enthusiasm”.

He said: “The prototype successfully proved the front-end technology and gives us confidence this technology can be in place well before 2019. 

It is imperative that all industry participants work together to ensure they are ready to connect to dashboard services in 2019.. Rob Yuille

“However, it is recognised some parts of the pensions sector have a lot to do to make themselves dashboard-ready.”

So far, the Pensions Dashboard Prototype Project, which was launched in September 2016 by the Economic Secretary to the Treasury, has provided demonstrations on how it will work to the public, in April, as part of FinTech Week.

In April, HM Treasury hosted a TechSprint event together with the Association of British Insurers and Aviva. Over a 24-hour period, developers and pension experts from more than 20 technology firms were competing to develop and display the potential applications the prototype dashboard system could unlock for consumers. 

The Department for Work and Pensions also provided resources to enable the State Pension to be incorporated in future dashboards. 

 According to Mr Brown: “The successful launch of the prototype shows how this system can be developed and implemented into the daily lives of advisers and individuals.”

Duncan Howorth, chairman of data specialist ITM, comments: “The pensions industry is no stranger to coping with change, which should stand it in good stead to get Dashboard ready, while the industry collaboration that has gone into the project so far certainly shows willing.”

There is also a one-stop-shop website, https://pensionsdashboardproject.uk/ which caters to both individual investors and to the pensions industry who want to see how the dashboard may work. 

From May, the ABI has been leading an interim phase of the dashboard, to maintain the momentum. 

There is still a lot to do, not just in terms of the technology, but also the need to understand consumer needs in detail, the costs and benefits for all parts of the industry, and to develop further standards for how a future service would be delivered.

Fiona Tait, technical director for Intelligent Pensions, accedes there is “a lot of work to be done”, but adds: “The progress to date is encouraging.

“We now have something concrete to look at, even if it is only a prototype, and the assurance that the project is feasible, at least in terms of the necessary data links.”

End users

Finally, is the public ready? And if they are, will they be able to benefit fully from what the industry is attempting to do in the creation of a pension dashboard service?

The ABI’s Mr Yuille points out: “Market coverage will be one of the primary metrics used to judge success. Dashboards that only cover part of the market could be a poor experience, and mean that consumers make decisions without all of their information.

“Therefore, it is imperative that all industry participants work together to ensure they are ready to connect to dashboard services in 2019.”

simoney.kyriakou@ft.com