The fearful world of PASA

Posted on May 3, 2023 by henry tapper

Well done PASA

 

I can’t claim to have been more than a spectator at the PASA Conference. I could and perhaps should have taken a stand and sold my wares alongside tech behemoths like Bravura or rising stars kike Knowa. But the trouble is that Pasa is not a trade show, it is an earnest organization trying to keep admin standards up in the face of fearful threats from the irresistible advance of technology.

 

Yesterday’s conference , held in the City of London, was clearly not wanting to talk about Capita and the data breaches on three of its servers. But I know from my blog stats that that is what most of my readers were interested in yesterday. Kim Gubler’s summation of the event was wry and summed up the mood nicely. Session after session scared her. Pension Administrators work in the shadow of the dark web, against unseen assailants who can sell one million data records of the mass affluent for £200.

Jim told us that on that dark web, there are menus offering  “cybercrime  as a service”. A reputation can be bought and destroyed for $700. Cybercrime is aided and abetted by the imposter – “Artificial Intelligence” – which is bringing down its price still further, soon what we know as cybercrime will be so commoditized that the people who work in this space will move on to even more destructive acts

There’s been a 110% increase in cybercrime over the last 3 years, but the counter-measures are usually designed to protect you against yesterday’s hacks.

Then there’s fraud, which is not the same as cybercrime (which is theft and extortion)

You start with identity fraud and move on to internal fraud, recruitment fraud, procurement fraud  and finally beneficiary fraud. My head was spinning with how many opportunities pensions offer to the fraudster. This way you budding Robert Maxwells!

We learned yesterday that we need to share information about our vulnerabilities; -“remove one vulnerability , you stop 50 attacks”. “Understanding the way cyber criminals work, reduces your vulnerability”. The lessons kept coming, we listened in fear.

PASA is that sharing safe space where we can gawp at the iniquities of the criminals , as our phones whirr away in our handbags. I felt diminished

The fearful world of pensions

I was not the only one. There were a lot of people apologizing for being in pensions at this conference. “I didn’t mean to get into pension administration, I just found myself here“. said Paul Sturgess.  As well as being fearful , I sensed low self-esteem.

People talked about the threat of pension dashboards that could inundate support teams with inquiries about partial matches, non-appearance of data, wrong data and misunderstood projections. The session on “Consumer Duty” seemed more interested in avoiding its reach than embracing its concepts.

The session on pension dashboards should have celebrated a partnership between Bravura and MoneyHub but became an extended whinge-fest about the unknown unknown cost of managing dashboard inquiries from curious or furious members.

It would seem that the true cost of pension dashboards has yet to be worked out because no-one knows how people are going to react to seeing that their GMPs aren’t reconciled or that benefits haven’t been adjusted to take into account the latest iteration of the McCloud ruling. My takeaway on this is that administrators cannot see the wood for the trees.

Giving people a clear view of their entitlements is creating more fear amongst the PASA faithful. Someone quoted a statistic that DC pension transfers had increased by 400% since the arrival of Pension Bee and the consolidators. Not only was this giving PASA members more work to do , but it was giving scammers the opportunity to do their worse.

Forgetting the frustration of savers finding they have on average 11 different pots and pensions to manage, the combination of pots by the yellow peril and its like is an extension of project fear that has gripped pension administration.

Prudence is one thing, but the current state of pot transfer times is not setting standards, it is way behind the standards we expect in other areas of consumer finance.

The rise of the administrator?

Considering the big ticket items in pensions; buy-out, DC consolidation ,  pot proliferation, dashboards and retail pension management are all data dependent, you would have thought PASA’s audience would be a confident lot.

But despite yesterday’s conference being rammed, the mood of the hall was downbeat and fearful. Pensions administration hasn’t just got an image problem, it is suffering from low self-esteem and a sense of doom. Where Capita leads others will follow and administrators are powerless, unprotected and understandably afraid. They do not show the confidence that their expertise should accord them.

I don’t know how PASA gets beyond this state of funk. If those who are setting standards in administration are so fearful of the future, then its membership will become resistant to change and become an impediment to necessary change.

If however it accepts that the advances in artificial intelligence , in data management and in digital transactions are inevitable, it must accept that creating friction through manual interventions is likely to be counter-productive. People will use dashboards to make decisions and some of those decisions will be bad ones, there will be complaints when people can’t find pots and there will be schemes that cannot buy-out or consolidate because of the state of their data.

PASA should be about making good things happen and  adopting a positive attitude to change. A celebration of the future rather than the current state of funk, would better befit an organization with such noble aims.

A bit more of this…

About henry tapper

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