Research indicates Open Banking has so far benefitted the economy by £4 billion, helping businesses and individuals manage their money in new and innovative ways.
By moving towards better data practices and taking practical steps on the way towards Open Finance, pension savers and schemes could similarly benefit.
Lisa Allen, Director of Data Services at TPR, said: “The world is undergoing a data revolution, and we want the pensions industry to capitalise on this — delivering more effective and efficient services, sparking innovation in service provision, and enabling savers to better manage and engage with their pensions.
“Today we have set out a blueprint to make this vision a reality and will now be working across the whole industry to drive consistent, coherent and, where possible, open standards for data on metrics that matter. This will mean higher expectations of the pensions industry, but also more modern data practices which will reduce regulatory burdens and enable more effective market competition.”
Strong foundations
Good investment and governance decisions require good quality data, but TPR research shows thousands of schemes still hold some data non-digitally.
Poor data quality leads to inconsistencies, increased costs and security risks, said TPR.
With these risks becoming increasingly important as the DC market consolidates and the deadlines for pensions dashboards approach, industry needs to work on building strong foundations now.
TPR said it would:
• set clear standards and expectations for data and provide relevant guidance and interventions
• ensure all data collected for its purposes is directly related to good saver outcomes and supports efficient and effective regulation, competition and industry innovation
• modernise how it collects data to reduce burden on employers, schemes, administrators and advisers by working towards creating an internal data marketplace – a centralised platform facilitating the discovery, access, and sharing of data among employees – which links to the government’s National Data Library and the wider external data ecosystem
• where appropriate and in savers’ interests, collaborate with industry to find ways to make it easier to access, use, modify, and share data
New technology
TPR will create a working group to help the pensions industry improve its use of digital tools, data and technology in savers’ interests.
It will also bring together pension and technology experts, along with professionals from other fields including to look at designing a framework for responsible innovation in pensions. This collaboration will help share ideas and speed up impactful innovations.
The strategy also called on schemes to safely adopt new technologies, including artificial intelligence (AI), aligning to the government’s AI Opportunities Action Plan regarding outcome-driven and inclusive AI adoption across our sector to improve efficiency and provide improved saver outcomes.
This year, TPR is set to launch an AI Advisory Council with internal and external specialists to ensure it meets ethical standards and regulatory obligations, and AI technologies support increased productivity and regulatory efficiency.
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