Open pensions; – the opportunity …and the threat.

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Darren Philp’s a passionate guy and you should read his piece in Professional Pensions on how we should allow the Pension Dashboard to be part of the open finance initiative.

He even has a Mary Poppins moment

Apps and aggregators,

tools and calculators…

can all help people more effectively manage their lifetime finances.

We need to embrace this way of thinking otherwise we risk becoming irrelevant.

Darren is pictured (above) in the games room at Smart pensions, I’ve been there myself. Behind him are the great 19th Century mansions of the West London elite (and the coachman’s mews) he’s facing a wall of Smart tech that represents Smart’s engagement with the Open Finance technology.

It is not just Smart, there are plenty of financial technology firms that are finding ways to be relevant

Pension Bee has shown how by ceaselessly championing the customer’s right to their data, they can build a business based on the principles of the dashboard. Data aggregation leads to pots of money flowing into the Pensions Bee Sipp.

Penfold recently raised £2m from the market to deliver digitally pensions for the self-employed

Software as a service providers like Abaka and MoneyHub are delivering new ways for leviathans HSBC and Mercer , to become relevant to their customers. Andy Cheseldine, who’s chair of both Smart and HSBC master trust, joke about how we – technologically challenged as we are, are inextricably bound up in this Fintech revolution.

The enterprise platforms that began with FNZ and Transact and have developed to Embark and Diligentia are enabling the sharing of data by migrating books of poorly hed and managed data to new open-source enviornments.

There are new players in the advisory space , Open Money , Nutmeg, Wealth Wizards and Multiply AI are developing nudge technologies that guide people towards suitable products. This is surely the direction of travel for investment pathways.

PensionSync have led the way in linking payroll to pension providers making “data transfer by spreadsheet” a dirty phrased.

And from the depths of academic thinking, voices as various as Con Keating, Iain Clacher and Chris Sier are looking at applications of the blockchain in the administration of pensions – using smart contracts.

The free-flow of data

Data is the new money; I sat in a juice bar last night and watched the people ahead of me pay for their drinks, I was one of the few people who used a card, most were paying with their phones.

For a large part of the population, money seldom touches their wallets, many don’t have wallets or purses, the advances in fast payments mean that a swipe of the phone can transfer money in PayPal into a flat white, without any visualisation of the three one pound coins my Mum would have found at the bottom of her handbag.

It is this world that Darren is pointing too and it is the people I was watching that Darren is referring to when he writes

Open banking has started to revolutionise how we manage our finances. This will only continue as providers of financial services realise that they risk being quickly overtaken if they are not delivering what people want and need.

People want to see the value of their accounts on phones and they want to spend the money they have in their accounts as they like.

The idea of pension freedom is ultimately, people capacity to spend from their pension account and budget based on their spending patterns using the tools that are available to us on open banking apps like  Starling, Revolut and Monzo. MoneyHub is a classic example of how people can regulate their spending to ensure that they remain solvent.

It is small wonder that MoneyHub is partnering Mercer in delivering an app to those who have money in Mercer administered DC plans. MoneyHub is managing the slow adoption of API technology which, once the pension dashboard becomes a reality, will become the norm.

Here is Darren again

Those in the industry that are trying to unnecessarily lock down the content of the dashboard, or who are arguing for only a single dashboard, are outdated and behind the times. It is time we really start delivering for the current and, importantly, the next generation of savers, otherwise we risk pensions becoming increasingly irrelevant.

When will open data go mainstream for pensions?

Darren isn’t a lone voice. Emma Douglas, who runs L&G’s DC pension business (and is also a NED at Smart) is also to be found writing in the pages of Professional Pensions.

Screenshot 2020-01-25 at 07.02.02…the mass of data stored by pension providers is often fragmented and split across multiple formats. However, developing tech can help scheme managers to bring different data sources together, analyse data and predict future trends, ultimately helping them to run schemes more efficiently. Legal & General, for example, has moved 2.4 billion rows of data since starting its own project to create a cloud-based digital platform for pensions – and this only covers a third of our book of business.

It is encouraging that Phoenix are also looking to migrate the multiple formats of their data onto the Diligentia Platform, making it possible to plug and play apps from a single data source. Surely this is the way forward for the pensions dashboard. Phoenix will, on the acquisition of ReAsssure, own the majority of the UK’s pension back-book, including L&G’s.

You can now see your Scottish Widows pension on your Lloyds Bank statement and see aggregated data on your banking app. Scottish Widows are already aggregating to their parent and pioneering the technology that can link them to the dashboard

Super aggregators like L&G, Scottish Widows and Phoenix will speed up the pace at which we can move towards a pensions dashboard. I sense that those at the top of Phoenix, including new CEO, Andy Briggs, get it. I know that Nigel Wilson gets it and I have a good insight into what is happening in the upper reaches of Lloyds Banking Group – they get open finance too

Who will be at the back?

We have seen with the adoption of ESG (and to an extent open-banking) , how quickly an esoteric idea can go mainstream. I suspect that we are already witnessing the start of open pensions on an industrial scale.

Firms like Smart, Pension Bee, Multiply AI, Open Money, MoneyHub, Abaka, Wealth Wizards, Nutmeg and indeed AgeWage are in the van and will hopefully be rewarded for pioneering.

L&G , Phoenix and Scottish Widows are mobilising their data and won’t be far away. Aviva has its digital garage in Hoxton and where others go, the likes of Royal London m Aegon and Prudential will follow.

But there is a third article on data in Professional Pensions that hints that there are many pension providers at the back. Guy Opperman, the Pensions Minister warns

Screenshot 2020-01-25 at 07.02.32 “Schemes can’t just wait for legislation, they need to improve their data quality now so that it is ready. [The] dashboard will help savers, therefore it’s in everyone’s interest that pension schemes are getting accurate, up-to-date information in place to help ensure the new services work well.”

Behind the progressive few, is a vast hinterland of pension administrators who are not thinking of the future, they are thinking of their short-term financial futures and not investing in the new technologies that can free up their data.

The genii is out of the bottle. Up and down Britain, fintechs are opening up finance and opening up pensions. Digital Dashboards are not the exclusive property of MAPS but available to anyone who has a phone, a tablet or  a laptop or a PC.

If you are not making your data available to data aggregators, it is not they but you who will be looking foolish

You  will increasingly be isolated from progressive providers. Apps like MoneyHub and AgeWage will show data only partially available on their dashboards. People will get fed up with the laggards that can’t show data.

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An AgeWage dashboard (incomplete)

People will want better than to see incomplete information with whited out areas on their apps , waiting laggard administrators to respond to data requests , weeks in arrears of those who offer on-line access.

People will take commercial decisions on the basis of expediency and move money away from pension providers who do not offer them the benefits of open pensions.

They want to see their dashboards, complete in real time and till we get to this point, pensions will continue to be the poor relation of open banking , indeed open finance/

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How we’d like people to see their pensions, with complete relevant information

Thanks to Professional Pensions

It’s a journalistic coup on behalf of Professional Pensions to bring together three articles that show a prevailing zeitgeist.

Those of us who are campaigning for better access to data salute and thank you!

About henry tapper

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