To safeguard against this, the Financial Conduct Authority is not looking to allow transactions of any kind to happen through dashboards, at least to begin with.
That is because the information people need to make comparisons and decisions is not going to really be there at the outset, and the FCA’s priority is to protect consumers from harm.
There is a balance to be struck, however, between preventing and perpetuating harms and stifling future innovation. There must be a Goldilocks zone at which everything is just right – not too stringent and not too lax.
There needs to be a level of augmentation from what we will have at the dashboards available point, namely, pension pot values and signposts to other sources of information.
Of course, even this represents a giant step forward because we essentially have nothing at the moment.
But, I would like to see this eventually evolve to a single sign-on so that people can link straight through to a scheme or provider site that contains more information about the pension such as underlying investments, which will not be included when dashboards launch.
If we can find the balance, with the right governance around it, I think we could have the best of both worlds and dashboards could make understanding their pensions easier for people and move pensions firmly into the modern era.
The open banking revolution
In open banking, there are some great use cases of how things can work. I want to see pensions dashboards become part of that open finance space so we can choose the ecosystem of components, as if from an app store.
For example, say I am in my 30s, I might want to plug in this app that allows me to put money into my savings and then, when that gets to a certain level, instantly transfer over the excess funds in to my pension.
This could work in a similar way to some apps and bank account tools that ‘sweep’ extra cash into savings automatically. But, even in open banking, we have not gone far enough. Collectively, we need to be far more ambitious for an industry as important as ours.
Imagining the future
We need industry and regulators to come together to reimagine what the future looks like, including both the upsides and the downsides.
There is a strong argument for exploring approaches to regulation, such as trying out ideas in a sandbox environment. In this way, we can see what may go wrong, and then design problems out rather than just saying 'you shall not pass'.
Once dashboards launch, there will need to be some feedback both from a technical perspective and on user experience, because there will likely be some nasty surprises to address. The project will evolve and change with users in mind. This cannot happen at a snail’s pace.
