What technology is needed for the dashboard?

Without either, the concept will not work. It's an electronic symbiotic relationship between the two, with data informing how the technology will develop the dashboard to full usefulness, and the technology creating a dashboard that is useful and safe.

To do this is no mean feat, as Fiona Tait, technical director for Intelligent Pensions, explains: "The biggest challenge will be for the pension and service providers to ensure they can provide quality data to the pension finder service."

Prototype demonstrations for the pensions dashboard show how far it has come already over the past few months. 

The HM Treasury Pensions Dashboard Prototype, managed by the Association of British Insurers (ABI), has made significant strides in the past few months, not least by proving to the industry that the underlying technology to deliver dashboards is already in existence.

Connecting the sheer volume of data out there is a crucial challenge that has held up the development of the pension dashboards until now. Duncan Howorth

As Rob Yuille, head of retirement policy for the ABI, says: “The project also proved that commonly used data standards could be adapted for industry-wide adoption.” 

According to Duncan Howorth, chairman of data specialist ITM, the prototype has already proven it is possible to link the vast amount of different data sources and present them to users through the dashboard technology.

He comments: “This requires adherence to data and messaging standards only.”

LV=’s head of policy, Philip Brown, is also confident that the “vast majority of building blocks” are already in place.

However, while the basic technology is already in place, there are some challenges remaining.

Front end

For Andy Kirby, managing director of The Pensions Portal, the front ends for the consumer still need work.

He explains: “My Money Alive colleague, Ian Beestin, was part of the winning team at the government/ABI techsprint, where user experience ideas were generated by tech teams in a two-day event against the clock.

“Based on what the teams came up with in such a short space of time, consumers will be offered well-thought through, attractive interfaces that will allow them to access the information they need, quickly, through a number of engaging formats.

“But the challenge is to make these interfaces intuitive. Great thought will have to be given to how the data is presented and interpreted so it becomes engaging, and meaningful, and have a strong call to action.”

If this is not in place, Mr Kirby thinks this will be a lost opportunity to engage people in their retirement planning.

Tech advances

Another challenge is simply the pace of change in terms of technological developments. 

Mr Howorth says technology changes at such a pace these days, that the real challenge will be ensuring the standards developed for the dashboards “do not preclude the take-up of new technology as it becomes available”.

Mr Yuille adds that the technological capability across the industry is not consistent but “fragmented”: some industry participants have the latest in technology; others have older systems. 

“Rather than [focusing on] technological breakthroughs,” he says, “we believe the key to unlocking the potential of dashboard services will be incentivising those who have not traditionally invested in technology to do so.

“As this will require investment, we believe the government will need to look at supporting dashboards with regulatory incentives that encourage schemes to become dashboard ready.”

Piecing schemes together

According to John Kelly, consultant at Mattioli Woods, while many platform-based pension providers “will be able to move quickly on this”, another potential barrier is how smaller or more esoteric and complicated pension schemes will fit into the dashboard framework.

Mr Kelly explains: “There are lots of old legacy pension schemes and final salary schemes which I do not see being ready for this.”

Ms Tait agrees: “The biggest challenge will be for pension and service providers to ensure they can provide quality data to the pension finder service.

“For private pension schemes and many of the older insured arrangements, the challenge is greater and there may be a temptation to try and avoid participation.

“Also, there are a number of self-invested personal pension and small, self-administered schemes which hold assets such as commercial property and loans.

“These types of assets do not necessarily have the ability to be valued and reported daily, and this will have to be emphasised to the end users with appropriate caveats.”

Filling the data gap

Then there is the matter of the so-called ‘dirty data gap’.

The pensions dashboard will work by collating all pension information into one place for the end consumer, securely and safely.

To do this, it will rely on providers supplying all data of all schemes – but herein lies the problem.

According to data specialist ITM, the majority of UK pension schemes and providers are missing crucial customer data, and the technology will need to be agile enough to cope with the missing information.

In a survey carried out among 440 pension schemes, who have more than 20m members between them, ITM revealed the scope of the problem.

The survey showed:

• Schemes set up before the year 2000 account for more than three-fifths of the total number of pension pots surveyed.
• These schemes have the highest average levels of inaccurate or missing data.
• Less than 30 per cent of workplace personal pensions have dirty data.
• Slightly more than 20 per cent of defined benefit occupational schemes have dirty data.
• 60 per cent of the missing or incomplete data among defined benefit schemes before 2000 was postcodes.
• 30 per cent of postcode data was also flawed in all other defined benefit and defined contribution data.
• Approximately 50 per cent of both workplace and group personal pensions set up before 2003 had inaccurate or missing national insurance data.

So why is this such an issue? Mr Howorth of ITM, which is one of the six technology partners working on the dashboard prototype project, explains: “The challenge within this, for many pension providers, is that legacy books and systems have created high levels of inaccuracy and gaps in pension data. 

“Data cleansing will therefore be a necessary step for many providers to get fully prepared for the dashboards.” 

He estimates this will need to take place on a “significant scale” over the coming months and years.

Mr Howorth adds: “Connecting the sheer volume of data out there is a crucial challenge that has held up the development of the pension dashboards until now.

“It will only be of real value to consumers if they can access data that is current, accurate and complete.”

Digital identity

Another area where the industry needs to show a greater adoption of technology is in the area of digital identity.

This is basically how providers can prove a person or company is who they say they are when it comes to identifying them in connections or transactions online, using any personal device. 

Says the ABI’s Mr Yuille: “Innovation is developing rapidly and in Gov.UK Verify, there is a solution that can be adopted by the private sector, although it will be critical to develop a framework in which all parties trust each other.”

This is a vital point for Mr Brown, who says: “Robust electronic authentication of customers and members is of paramount importance, although we are on the cusp of a solution to this.

“As with all aspects of the pension dashboard, there are some challenging questions – but nothing is insurmountable. Where the challenge will exist is ensuring the core central processes have the right technical governance in place to support and enable innovation.

“Controlling access is pivotal, and a strong framework is essential.”

Pension Finder Service

The dashboard will also have to work with the DWP's pension finder service, which launched last year.

So far, the tracing service has been popular with people looking for lost pension policies.

According to the DWP, since its launch, the Pension Tracing Service has:

• Allowed people to search a database of more than 320,000 pension scheme contact details.
• 83 per cent of users are either satisfied or very satisfied with the service they received.

Moreover, according to data from the DWP:

• There were 169,000 tracing requests in 2015/16 (this covers the online service, agent referred, telephony and postal channels).
• Over the past 10 years there has been a 436 per cent increase in tracing requests.

Parliamentary process

At a recent Marketforce conference, industry commentators lamented the positive momentum between government, advisers, technology companies and pension providers who were working together on the dashboard risked being lost as a result of the political upheaval.

Of course, between starting the information gathering for this guide and the publication of it, we've had a surprise general election - perhaps more surprising for Prime Minister Theresa May than for anyone else - a complete cabinet reshuffle and new people at the Treasury, the Department for Work and Pensions and across the Conservative front bench.

Simon Kirby, former economic secretary to the Treasury, had been leading the government's involvement in the pension dashboard process. 

However, he lost out to his Labour opponent in the 8 June general election. Kate Smith, head of pensions at Aegon, comments: "Mr Kirby losing his seat in the election must not put the success of the pension dashboard in doubt. 

"The dashboard already faced many challenges, which can only be resolved by government involvement, such as compelling all schemes to provide data when customers requested this. It now risks losing momentum."

She warned against the dashboard being "kicked into the long grass".

There are also other key players whose disappearance from the political scene could cause some problems in terms of maintaining momentum. 

George Osborne, the chancellor who mooted the whole concept of pensions freedoms back in 2014 was out of a job by 2015, and replaced as chancellor of the exchequer by Philip Hammond. 

In 2014, the pensions minister was Steve Webb (now Sir Steve Webb, head of policy at Royal London), who had been in position since 2010, making him the longest-serving pensions minister for decades.

By 2015, he was replaced by Baroness Altmann, who was summarily replaced in August 2016 by Theresa May, who had acceded to Number 10 after the UK voted to leave the European Union, giving former Prime Minister David Cameron little choice but to announce his resignation to the press before humming his way back inside to pack his suitcase. 

Now that Damian Green has been promoted to first secretary of state, David Gauke, previously chief secretary of the Treasury, is the new secretary of state for work and pensions.

If it sounds like a Yes Minister merry-go-round farce, it probably is. But in terms of policy, all this uncertainty has come at a bad time for pensions policy, financial technology, the Financial Advice Market Review and the development of the pensions dashboard.

simoney.kyriakou@ft.com