The pensions industry is in the race to get data right, to make sure everyone is where they need to be on the non-negotiables of data quality and data security.
But our goals have to be about more than just eliminating errors and reducing complaints. GMP Equalisation and the McCloud judgement have put a sharp focus on data rectification for pension schemes. Whilst data rectification is one thing, the ability to harness data for enhanced member engagement is quite another.
I recently caught up with Doug Brown, Capita’s Chief Data Scientist and Jon Roughley, Director of Enterprise Strategy at our partners Experian to look at the impact data could have on the digital services we deliver to pension scheme members in the future.
Accurate personal data enables us to develop and utilise targeted personal communications, solving the perennial pensions puzzles of awareness, engagement and action. We know that only a third of people understand their retirement options and have a clear idea of what income they’ll need1, which is a scary thought for generations of people preparing their own later life savings. We’ve got to start doing things differently and data is the key.
Talking with Doug and Jon, we all agreed that, as an industry, we’re at a moment of unprecedented opportunity, and now is the time to act. The stars are aligning: the pandemic helped us pick up some of the digital stragglers, so members are ready for these services – and providers are increasingly in a position to deliver them.
Communication is a non-negotiable here, but we’ve got to be smart about this. There’s no sense bombarding members with every bit of data we have, we need to share information in bite-sized chunks to make it digestible and actionable. After quality and security, schemes should prioritise data accessibility, so that members can connect with their pension how and when they want. The pensions app we’ve developed for clients enables members to access their pension information where and when they want, and an increasing use of messaging and social media channels puts pensions in members’ pockets.
There are even more opportunities when we consider combining datasets together. Jon shared his experience using open banking data to show people what their lifestyle and spending patterns were in the present, and then project that forward to give them a clear picture of the amount of money they’d need to maintain their lifestyle.
Now, imagine we combined that with the data from our online pension portal – or, in the not-too-distant future, the pensions dashboard. Members can see how what they have measures up to what they’ll need, but in a way that’s grounded in the here-and-now, making for a clear and concrete call to action.
There’s also the potential to collaborate with other providers. As Doug observed, we already have save-as-you-spend banking where, when you use a particular card or app to pay for something, a small percentage of your expenditure is added to your savings. We’d need appropriate guidelines in place around financial advice, but what if a pension scheme partnered with a bank or credit card company so that, when you make a purchase, a little bit of money goes into your pension?
Or – and this was Jon’s suggestion what about a partnership between a pension scheme and a price comparison site? Together they could offer an annual financial health check enabling scheme members to identify savings opportunities and then split those savings, say 50% back to the member to use as they choose, and 50% into the pension to provide for the future. We wouldn’t expect pension providers to become price comparison providers, but by using our data and data analysis tools in collaboration, we could benefit – and so could scheme members.
Our conversation only really scratched the surface of what data offers. Analytics, algorithms, artificial intelligence it all starts to sound quite futuristic, but the point is that the future is here. We’re engaging with these things every day on our smartphones and now is the time to harness them and use data to personalise the pensions experience like never before.
1Source: Hargreaves Lansdown, October 2020
Stuart Welsman
Director, Client & Customer Solutions
Stuart is responsible for setting the vision for our next generation of pension administration services. He works with new and existing clients to understand their objectives and build a digital roadmap that improves Member engagement and enables a high degree of Member self-service. By leveraging the latest digital capabilities, solutions take weeks not years to develop and deploy, including exciting new Messaging capabilities using WhatsApp and Apple Business Chat, that help put ‘Pensions In The Pockets’ of Members.
