The FCA is currently consulting on the regulatory framework for what it calls “Pensions Dashboard Service Firms” – the companies who will operate pensions dashboards. In the pilot phase the Pensions Dashboards Programme has announced three trial providers – an insurer (Aviva), an open banking platform (Bud) and an open data fintech (Moneyhub) – but it is expected that a wide range of market participants will choose to offer a pensions dashboard.
One key feature of pensions dashboards will be the ability of users to ‘export’ their data. Although dashboard providers may choose not to offer this facility, it seems highly likely that many will offer the user to the ability to download their own data and also to export the data to the provider’s site.
The FCA consultation said that although this raises potential risks, there would be problems if users could not export their own data.
This includes the risk that people would use ‘DIY’ methods such as taking screen captures of their data and then sharing it in a much less secure and less controlled way.
However, the FCA rules propose that there would only be two places where the user could export their data:
- Export to themselves OR
- Export to the dashboard provider (or firms in the same group with permission to give investment advice);
FCA say that one advantage of allowing export in this way would be so that the data could be used to ‘pre-populate’ tools such as retirement modellers in order to help savers consider their options.
Given the large number of fragmented pension pots, not least since the advent of automatic enrolment, it is widely expected that one consequence of the launch of pensions dashboards is that individuals will be prompted to consolidate their DC pensions with a single provider. But if the only direct way in which consumer data can be exported to a provider is if they operate a pensions dashboard, this will put such providers at a head start when it comes to ‘harvesting’ DC pots.
Individual users will, of course, have the option of logging on to a dashboard, exporting their data to themselves and then uploading it to a third party site (such as another DC consolidator). However, this will be a much more involved process than doing it directly from the dashboard, especially one that links directly to tools which have been ‘pre-populated’ with member data.
Commenting, Steve Webb said: “When pensions dashboards become available to the public it seems highly likely that this will drive member consolidation of their DC pensions with a single provider. If users of a dashboard can press a button and export their data into attractive tools, offered by the dashboard provider, this will ‘hook them in’ to engaging with that provider and greatly increase the chance that any DC consolidation is to that provider. This could put dashboard providers in prime position compared with other consolidators who would have to get users to download data – possibly from a rival’s dashboard - and then re-upload it to a different site. We are very likely to see a ‘dash for DC cash’ when dashboards go live, and the restrictions on data export mean providers who set up their own dashboard are likely to be the winners of that race”.
The FCA have indicated that the exported data should not include full customer reference numbers and should not be sufficient therefore to allow for immediate transactions. Nonetheless, a DC consolidator who has been supplied with a full list of a saver’s pensions will be extremely well placed to complete the process of pot consolidation.
Full FCA proposed regulatory framework
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