Why pensions must bank on change! We need Open Pensions not a data monopoly.

Bounding on stage like he’d just won the 3.15 at Hexham, Guy Opperman exclaimed

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The occasion – a Prospect discussion called “Banking on Change; the discussion “what open banking could mean for you”.

On an evening where BREXIT was whistling around Westminster like a Texas twister, we sat in a little theatre in St Ann’s gate and considered what open banking could do to foster financial inclusion.

What open banking clearly meant to those in the room was an opportunity to bring day to day financial services to people who have previously felt excluded from them. I spoke to Mick McAteer afterwards who ventured that the penetration of Monzo , Revolut and Starling into the deprived communities he knew was slim, but Opperman spoke well about how the integration of banking into the daily lives of those who carry smart phones, could be universal in time. He spoke of his own work with credit unions and of the work of Atom Bank – in which he has played a great part.

I pressed him on whether he saw the same happening in pensions and his answer was a categorical “yes”.

I don’t think Opperman is playing at his job. He asked to be Minister for Financial Inclusion as well as Minister for Pensions. But I do think he may be short on the detail of the solution – and that worries me.

Open pensions face an existential threat.

In my question to the Minister , I explained that I felt we are at a tipping point. Either we go forward, as banking went forward after being prodded by the CMA; or we go backwards into the arcane world of trade bodies that has kept pensions a closed shop these past forty years.

The issue is data, the oxygen of a digital culture.  The protagonists , those who want a new open source for data where third parties can freely apply for information under the rules of the Data Protection Act 2018. On the other hand are the trade bodies, principally the ABI – that would have data managed by a single organisation who could control and in time sell, access to it. The latter model is the very opposite of open pensions, though like a wolf in sheep’s clothing, it is the ABI’s vision for a “pension dashboard”.

Three years ago I went to a number of meetings on Open Banking where banks told us that the protocols that they were being asked to adopt – the security conventions, the interfaces and the data access requests – were simply not possible with the systems they had in place. Three years later, the protocols , conventions and interfaces are in place. The challenger banks have now become a mainstream part of banking culture and look set to re-arrange the way that larger old-fashioned banks work. Starling and Monzo will change banking for good. This is because Fintech was given its head.

Now I hear precisely the arguments from insurers and the large pension administrators about their systems. It is unimaginable they say  – for people to have access to their data via third parties. Data- they say – must flow through a single hub organised through an organisation owned by the ABI .

Think Mexican mobile phones and the damage a monopoly did to the Mexican consumer and economy. Think the monopolies owned by BT. Think of a world of banking without challenger banks. That is what we will get if the Government gives a monopoly to a single company to find our pensions.

I’m with Gregg McClymont, who comments in Pensions Expert

Some say multiple dashboards could drive competition, but there are concerns over whether multiple dashboards will affect credibility.

McClymont said: “The costs of duplication by having multiple pension-finding services are outweighed by the competition that that drives.”

And let’s make no bones about it, the dashboard is all about finding pensions, the rest – for most people – is second order. Lost pensions are the worry! How can we possibly talk of “engagement” if we don’t even know what we’ve got to engage with.

If we cannot find information on where our pensions are though open- sourced pension finders, then we will have missed the opportunity of a generation. The very concept of open-pensions is under existential threat before it is even born.

What I want from Guy Opperman , Esther McVey and the DWP

I don’t want a dashboard, I don’t want a data monopoly through Origo, I want proper open pensions as outlined at the original meetings on the dashboard by Simon Kirby.

I want proper competition , as we are getting in banking, and I want that competition to come from start-ups as well as established players. I want pensions to be challenged by organisations like AgeWage and Pensions Bee – just as I want payments to be challenged by  Faster Payments.

Chris Sier’s Clear Pensions initiative is challenging the funds industry to deliver data through an open source (well done Aon for helping).  AgeWage is challenging pension providers to deliver data on ordinary people so that people can understand what is really happening to their money.

Chris and I both need the support of Government to get our data and so far we have got it. But the door could easily be shut in our faces, if we retreat to the old ways where data is controlled by the people who manage the existing money.

What I want is open-sourced data that flows freely and securely from place to place, enabling people to understand what they own and take the best decisions on their money that they can.

I believe this can best be achieved by banking on change. That means following the lead given us by the challenger banks, by organisations like MoneyBox, MoneyHub who manage data to make our savings easier to manage.

Gregg McClymont, commenting  in Pensions Expert was spot on!

Some say multiple dashboards could drive competition, but there are concerns over whether multiple dashboards will affect credibility.

McClymont said: “The costs of duplication by having multiple pension-finding services are outweighed by the competition that that drives.”

It does not mean handing a big centralised contract to the love child of the ABI. It does not mean creating a monopoly for data access. It means encouraging competition in a free but well regulated market. It means listening to the Information Commissioner rather than the nay-sayers at the insurers and third party administrators.

Above all it means having the courage to start and finish the job of making pensions open. We cannot bank on much – but we can bank on change.

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About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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