Feature topic - automation
Henry Tapper, chief executive officer of AgeWage, explains what this initiative means and how it couldwork for payroll Open finance
T he Financial Conduct Authority finance’. Several commentators within the financial services sector (including myself) see it as the key to unlock our engagement with the money we own – or owe. One of these commentators, Ian McKenna, has gone on record as saying: “I now regard the whole debate over what should/should not comprise a pensions dashboard as a red herring. For many months I have been arguing that emerging open finance services would rapidly overtake those solely intended to provide pensions information.” It is hardly surprising, but Sheldon Mills, the FCA executive charged with delivering the initiative, recently had this to say in a speech: “Imagine one morning on your way to work you open an app that shows you the history and insights of every financial product you own: your current account history and spending habits; your savings and investments; your mortgage balance and projected pension pot. All in one place; all a couple of clicks away.” I had a recent conversation with my doctor which involved me asking a lot of technical questions. Though the complexity of those questions was beyond my general practitioner (GP) she had a smart phone and was able to answer each question with its help. In fact, the iphone became the third person in the room. I am sure everyone has a similar story to tell. I am equally sure that it is not in the British Medical Association’s handbook for GPs to respond to questions with the quip “I don’t know but i know a bot that does”, but National Health Service professionals are finding ways to deliver information that outwit the handbooks. Indeed, as my GP (FCA) has published a call for input to an initiative it is calling ‘open
told me, the textbook she’d consult would be out of date by the time she read it. Open finance is a system of data transference that puts answers in our hands in real time. It is something in which the payroll profession should be hugely interested, and which progressive master trusts are developing. Indeed, product providers are waking up to the competitive advantage they can create by offering dashboards that allow their members to see other pension products and aggregate to them.
delivering a single dashboard from which other dashboards could develop but nearly twelve months later, little has happened. This has suited the strategies of many pension providers. Established players have decided it is best to adopt the Department for Work and Pensions’ (DWP’s) approach of slow delivery. Meanwhile, the FCA’s open finance initiative appears to be promoting a fast-track approach to delivery that is encouraging the more agile ‘pentechs’. This year looks likely to see the competing strategies of established pension providers such as NEST (National Employment Savings Trust) and People’s Pension clash with the disruptive visions of new players such as Smart Pensions and Pension Bee. The former will get behind the state sponsored dashboard favoured by the DWP and The Pensions Regulator while the latter will align themselves with the Treasury and FCA’s vision of open finance. At The Rewards event in 2019, it was interesting to see the payroll and reward sector voting for the first time for Smart Pensions over NEST and for the enlightened digital delivery of the Dorset Healthcare University Trust in delivering pension information. Payroll has transformed since auto- enrolment started. In those seven years I have seen the industry embrace the API (application programming interface) and move towards the kind of digital interactions that would enable delivering a pensions dashboard in a fraction of the delivery time envisaged in the government’s proposed timetable. If you are in payroll and want to read about open finance, visit http://bit. ly/2Qa3QYK. Alternatively, you could ask your phone about the FCA and open finance! n
...a fast-track approach to delivery that is encouraging the more agile ‘pentechs’
Building the functionality to launch these products is relatively easy but connecting them to third parties is difficult. The FCA’s paper lists the barriers to delivery and most of them relate to protective strategies adopted by established pension providers keener to maintain market predominance than interact with more agile newcomers. The government appear to be in no hurry to deliver a pensions dashboard. When it first mooted the project in 2016 the idea was to have a prototype in place by the end of 2017; though this was achieved the next fourteen months were spent arguing who would deliver the dashboard and whether multiple dashboards could be offered by commercial players. At the beginning of 2019, the government announced it would be
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| Professional in Payroll, Pensions and Reward |
Issue 57 | February 2020
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