Providers at risk of 'exodus' if they fail to innovate

Providers at risk of 'exodus' if they fail to innovate

Providers that fail to innovate to help customers will face an "exodus of assets".

At the Association of British Insurers’ Open Pensions: future of savings conference, Clare Reilly, head of corporate development at PensionBee, warned providers that failure to innovate would lead to a loss of customers.

"We will start to see a real divide between the incumbent providers that don’t innovate or embrace technology and the more agile, newer companies whose processes are more tailored to the customer," Ms Reilly said.

"Providers that fail to update their services to make them more customer friendly and smart will experience an exodus of assets. Customers will move from slower incumbents to slicker providers."

During the conference, the Department for Work and Pensions (DWP) said pension providers have traditionally been slow to innovate and that more need to prepare for change.

Fiona Walker, deputy director, automatic enrolment and defined contribution pensions, said: "We are coming toward the end of a period of great change and there are more people than ever enrolled in workplace pensions.

"Pension providers have been very slow to find areas where they can innovate. We need to be thinking about how we can streamline transfer times and innovation can help that.

"Quite a lot of innovation tends to target people who have bigger pension pots but this needs to be broadened.

"We have to find to prepare for change and find the right time and place to regulate those innovations."

Yesterday (10 October) fintech provider Origo said the pension dashboard could help drive innovation in the same way open banking has.

It published a 13 page paper called Pensions Dashboard to Open Pension which explained how the project can deliver an "open pensions" system.

Open banking allows customers to share their current account information securely with other third-party providers, who can then integrate this information into their services.

Megan Caywood, chief platform officer at Starling Bank, said: "People don't want to go through their bank accounts, mortgages, pensions and Isa on separate platforms anymore. 

"Open pensions can integrate all of these options and allow customers to manage all of their assets in one place. It simplifies the process and creates more transparency for the customer.