As Britain embraces digital technology, pension administration remains more or less in the Stone Age.
While the industry shifts from previous models of retirement planning to individual responsibility – one of the more useful initiatives that could boost engagement appears at risk of being shelved.
There are fairly well-substantiated rumours that Esther McVey, the secretary of state for work and pensions, is looking to scrap plans for the pensions dashboard – presumably because the logistics are proving more difficult than previously hoped. However, many of the tools needed for the job are already in place.
Clearly all pension providers must participate in the dashboard and obtaining data from legacy systems – particularly those built in a bygone era or those gained through acquisition – will be difficult. But this need not be a barrier.
Why not phase the roll-out? More modern pension providers, who can provide data immediately, should be ‘live’ first. This will give those whose data is held in older infrastructure more time to upgrade. It also means that the dashboard can move forward without having to wait years for all stakeholders to be completely ready.
Security, particularly in the age of General Data Protection Regulation (GDPR), is a valid concern. However, the dashboard could adopt the approach taken with 'open banking'. In reality this means the government must ensure (and police) a standardised, secure mechanism to data access. Let the pensions industry manage the physical user interface.
GDPR also raises concerns around data sharing; however, the technology exists to combat this issue through an open API and user managed access.
Imagine an individual being able to view their dashboard through a preferred platform. With the click of a few buttons, they can switch to a solution that is more aligned with their personal circumstances or seek the services of a financial adviser.
There is a clear and pressing need for this project to go ahead in order to breathe some much-needed life into the pensions market.
Ola Abdul is founder and chief executive of Fundment