Data accuracy has been a long-standing issue within pensions, historically scheme specific data has been the main point of focus but in recent times the accuracy of common data has caught the attention of the government and regulators.
This challenge is not limited to the pensions sector; however, it is compounded by certain aspects that are unique to pensions – such as deferred members.
There are some synergies with the wider savings and wealth management markets in that many consumers set up policies that are either lump-sum deposits or by standing order, which require at most an outbound annual statement, and little to no inbound activity, therein lies the challenge of maintaining up-to-date data.
It would be a unique case that that data provided by a member upon registration stays the same over the years. Broadly speaking there are three key events that happen throughout a member's life and that would impact data quality – moving house, a name change (typically due to marriage or divorce) or death.
Royal Mail statistics indicate around 10% of the population move every year. Undoubtedly that fact will impact data quality across every pension scheme, in a negative way.
Managing data quality is typically seen as a retrospective process largely due to the data that is used and when that data was captured.
Examples of this include:
This retrospective approach has given birth to the tracing industry while cementing credit reference data as being seen as the ‘best available option’ to derive confidence in data accuracy.
When these processes are questioned it is not uncommon to hear ‘that’s the way we’ve always done it’. However, as data and technology are constantly evolving, processes that have been the same for several years, are ripe for review and improvements in operational efficiency.
There is no silver bullet
Due to the many nuances to life, it is safe to say that there will always be a requirement to trace members - there is no one size fits all approach to data accuracy.
But now more than ever there is an opportunity to use data and technology in harmony, specifically to revolutionise operational processes for the greater good - enhancing the member experience, delivering processing efficiencies, stimulating member engagement whilst reducing fraud.
What does the industry have to say?
Changing any BAU process to something new is a significant seed-change, which in some areas (most notably tracing companies) has been met with trepidation.
Conversations with administrators, and some forward-thinking pension funds, echo these views, people are starting to say – “there has to be a better way of doing this” and there is.
Spencer Lynch, Director of Innovation for Life & Pensions, works with some of the most recognisable pension schemes across the UK to deliver a digital-first member experience. Below he shares the foundations that lead to data accuracy and operational efficiency.
“In order to provide the best possible experience for members whilst delivering operational savings and reducing fraud, the focus must be on understanding interactions, mapping out member journeys and processes, then constructively questioning each step to establish if any data or technology could positively improve the process.
Adopting a transparent, structured approach, layering and utilising data, testing new theories and acting on the results is what will give an optimised member experience, if we can deliver operational efficiencies and minimise exposure to fraud along the way – it’s a win win.”
If data accuracy is important to you, and you like what you’ve read today be sure to get in touch to arrange a chat with one of our pension's experts.