How the pension industry leverages innovation in technology

IPE Panel Talk Post

The pension industry has traditionally shied away from innovation in technology, in favour of embracing compliance or the continuity of routine. However, big changes in regulation in recent years have shone a spotlight on these systems and encouraged a new approach to technology. For some, that has kicked off a big programme of work, a digital transformation. For us here at Smart, these changes have been an opportunity to disrupt the industry, by-passing the need to transform and simply adopt current best practices from the outset.

This inflection point was the topic of a panel talk I attended yesterday held by the IPE Pensions & Technology Forum. Three Chief Technology Officers (CTO’s) chatting about innovation, technology and our favourite cloud hosting partners – what more could you ask for?!

As a CTO, you are on point to deliver the best technical innovation for your business – this much is clear. But how you approach this goal is driven by many factors. The key ones centre around  your experience and the requirements of your business. This made our talk yesterday fascinating, as our combined experience spoke for itself but each business had different objectives meaning that different approaches were taken.

Carlo Svaluto Moreolo, the Deputy Editor at IPE, chaired the session and led us through a variety of topics, ranging from kicking off a big digital strategy, the classic build vs buy question, and selecting contemporary cloud vendors, through to the culture changes an organisation makes and how the customer benefits from these changes.

These topics are crucial in delivering a successful digital strategy.

Build your own or buy off-the-shelf?

This is always an interesting debate. There are often very good business cases for both options and making the right decision early in the project is vital. Internal stakeholders usually heavily influence this, as compliance policies, procurement and sales teams and more want the project to be aligned to their objectives. During our talk you could hear these sorts of requirements being addressed from the various CTO’s as we each talked through our responses. In my case, Smart chose the build option, starting from scratch. Others built or bought, but each had to transform because their organisations had more history than ours when the project began. Transforming from one technology to another is innovative, but does ask more of the teams involved – which dovetails into the next topic.

Cultural transformation

This topic is close to my heart, as I believe that a good working culture is key to a productive engineering team. So by definition, the same logic should apply to the wider teams involved in the project. When you are building technology from scratch, you are also building business processes and ways of working at the same time. When you are transforming from one technology to another your technology must adapt, but so too must those business processes and the people running them. A cultural change is needed in hearts and minds, making the project a digital revolution as much as a digital transformation. For many organisations this is straightforward, but some of those older businesses may take longer to achieve both of these objectives.

Stakeholders and policy management

This issue is often overlooked when first planning a project like this, but it’s an important one to validate before kick-off. I’ve witnessed other organisations choosing to limit their transformation goals because internal policies have meant they had to keep customer data in-house, rather than move it to a contemporary cloud solution. This is always done with good intent, to safeguard customer data following tried and tested processes. But doing so also brings risk, as the rest of the project heads off to a cloud solution (often a digital customer experience layer) that then has to navigate back to the legacy system on-site. In summary, working with these stakeholders early in the process, to look at ways to transform the policies at the same time as transforming the technology, is another key to success.

Customer success

Customers today know what good looks like. They are used to mobile banking and boarding a plane with a virtual boarding pass. These standards are set in stone for any business looking to acquire and retain customers. Therefore any digital transformation project has to meet the demands of a very savvy customer. These include a good customer experience, with engaging user interfaces, and a focus on the speed at which those customer journeys operate. When kicking off a project like this you often agree on some NFR’s (non-functional requirements), an obvious one being performance. In our industry this can mean that when a member changes their contribution percentage on a website, does this happen in real time or overnight? The systems behind the scenes dictate this transactional speed, but the customer expectation is always the same –  “here and now, please!”

In summary, technology is the sum of many parts and the success of a big digital strategy can be measured by assessing how well those different parts work together, whether they’re humans or software.

If you'd like to talk about any aspect of the technology and services we offer, I’d be delighted to hear from you [email protected]. If you’d like to read more about what we do at Smart click here.

About Smart

Smart is a global savings and investments technology platform provider. Co-founded in 2014 by Andrew Evans, Group CEO, and Will Wynne, Group MD, it is one of the UK's largest providers of workplace pensions. Its award-winning master trust, Smart Pension, is overseen by independent professional trustees.

In 2020 Smart Pension was named Master Trust Offering of the Year at the Pension Age Awards. Other awards include DC Master Trust of the Year, DC Innovation of the Year and Retirement Innovation of the Year in the 2019 UK Pensions Awards. Smart Pension was also named European Pension Fund of the Year 2019 in the European Pension Awards.

Legal & General Investment Management (LGIM), J.P. Morgan, Link Group, Natixis Investment Managers, Barclays, Chrysalis Investments and DWS Group are all investors in Smart.

We tweet as @SmartPensionUK.

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