Cultural transformation is key to enabling digitalisation, according to a new paper from The Pensions Administration Standards Association (PASA).
“Transforming Pensions Administration: The journey towards digitalisation” suggests that while digitalisation aims to improve user experience for all, cultural change is necessary.
It says that automated basic processes and quotations, instead of being seen as expenses, should be viewed as long-term investments that bring value to savers.
The paper also points out that the conventional understanding of fund management—which focuses on generating income—and pension administration—which focuses on serving savers at a cost—needs to be questioned and changed.
Additionally, tackling the financial education gap should focus on long-term savings and financial planning for everyone, as well as increasing the participation of pension savers and their retirement funds.
The paper also suggests that the future of digital administration may involve artificial intelligence, machine learning, and automation for enhanced efficiency and engagement.
It highlights that open banking data, for example, can provide holistic customer insights which could encourage pension and investment saving.
Furthermore, the paper emphasises recurring themes driving digitalisation, including cost efficiency, scalability, and the shift to paperless offices. Fintech innovations like APIs, robotic process automation, and data portals have influenced pension digitalisation.
Additionally, new technologies such as AI, ML, and LLMs have implications for pension administration, while blockchain, once promising, encounters challenges due to coding frameworks and regulatory scrutiny.
It also notes that reluctance to digitise schemes stems from complexity, data security worries, trust issues, digital literacy, and cost considerations, yet the advantages of digitalisation encompass enhanced efficiency, accessibility, and transparency.
