Artificial intelligence and other technologies are developing at breakneck speed, and many have pensions applications. It is time to explore the best practice in relation to these emerging technologies, says the Pensions Administration Standards Association's Girish Menezes.
The legal community, IT industry and manufacturers of self-driving cars are turning to philosophy professors to evaluate the paradoxes of self-learning artificial intelligence programmes.
We at Pasa look forward to exploring innovative avenues and identifying practical applications of new technologies so we can start talking about how we make its adoption work in practice
An obvious realisation is that humans are poor drivers and make dubious ethical decisions in stressful situations. However, a more subtle observation is that, as these computer programmes develop, at some stage we may be enslaving what is likely to evolve into a new species.
Innovation is evident in pensions
At the Pensions Administration Standards Association, we have been excited by the prospect of leveraging these leaps in artificial intelligence, robotics and biometrics to improve member experience when interacting with pension arrangements.
The opportunities are extensive. Robotics can integrate disparate legacy systems, doing away with the need to invest millions on new administration platforms.
Artificial intelligence can support members with complex accumulation and decumulation decisions. Biometrics can reduce fraud.
There is some exciting work happening in the pensions market and Pasa continues to be engaged across the spectrum of innovative developments.
This could be anything from defining data standards for the pensions dashboard, to participating in skunkworks developed by insurance companies.
However, we do recognise that this drive towards 24/7, accurate, efficient and intelligent pension administration is not ubiquitous in the industry.
A number of administrators still work off paper member files, poor quality digital data and calculations done by hand on A4 photocopy sheets.
On top of this, member verification is dependent on birth certificates that can be bought on the internet.
Let's set best practice now
Because of this, Pasa has been looking at forming a working group to explore best practice in regards to emerging technologies and pension administration.
This might include specific technologies, such as robotics, or member-facing products and services. The pensions dashboard is an obvious service where a number of these concepts come together.
We are seeing exciting investments by insurance companies, mastertrust providers and even by administrators of defined benefit arrangements. We know of at least one mastertrust that defines itself as a fintech company and robo-guidance is making its journey from ‘early adopters’ to the ‘early majority’.
Pensions has never been such an exciting area. We at Pasa look forward to exploring innovative avenues and identifying practical applications of new technologies so we can start talking about how we make its adoption work in practice.
Girish Menezes is a director at the Pensions Administration Standards Association and head of administration at Premier Pensions Management
