The pensions industry has built up a ‘technical debt’ that must be addressed if it is to engage and educate savers, experts have warned.
Delegates at the Pensions Administration Standards Association (Pasa) conference in the City of London were told pensions technology was at least “10 years behind” other industries.
Paul Sturgess, director of Pasa said: “I fear that the time frame [for keeping up with available technology in other industries] has got bigger than the heady days of 2000.”
Paul Leandro, partner at Barnett Waddingham, said the industry’s “technical debt” would take a huge effort to pay back.
Jon Hawkins, principle business consultant at Bravura Solutions, said the slow uptake of tech was an issue endemic to pensions.
He said: “Pensions is a long-term industry and that has meant technology has been long-term, coming through being paper based, to microfiche and faxes and so on.”
But this meant systems have ended up "like a jigsaw, so that when you move it you lose little bits of data.”
Dashboards and pensions technology
Hawkins said the industry had learned how to move its data but with the introduction of dashboards looming more work was needed.
He added: “We have some good tech and we have some shocking tech, but that shocking tech leaves us in a precarious position.”
Anton Padmasiri, founder of Wealthos told delegates: “Macro-economically pensions have changed over the decades. From everyone being all but guaranteed a pension and not really having to worry about anything until they retire, to having to take an interest and significant responsibility for their retirement.”
“But industry had not changed underneath to support that shift.
“If you take tech on its own we have shifted from a mainframe to client servers and now the cloud.
“What the cloud has done is get rid of the need to have servers. Yet 99.9 per cent of all pension assets are still administered on software [server based technology].”
Hawkins said he believed the dashboard would prove a catalyst for the industry to become more consumer focused.
“People will be able to see it and it won’t be within your control. It will put things in the spotlight and give us a whole load of questions we are not even thinking of.”
Giving pension savers a meaningful experience
Hawkins believed there was capacity to give savers a pension experience that looked like Uber but the adoption curve was proving slow.
“The pensions industry needs to adopt technology so it works like all the services we use on a daily basis.”
Catherine Economides, design architect at Bravura Solutions, said the industry needed to shift its tech focus to younger savers.
She said: “A younger pension holder should be shown the effect of taking maternity leave rather than how much they need to retire.
“The industry often falls down on presenting the implications of the the long-term affects of pension saving and tech could fill that gap.”
