Four tech trends to watch in public pensions administration

Simon Barker, Strategic Advisor, Civica Pensions

23rd April 2021

There’s no doubt that the COVID-19 pandemic has transformed the way we work, with many moving to remote working for the first time. In some ways, this has enabled the rapid development of digital transformation as public service pensions administrators adapted to providing even more services remotely and under considerable pressure. But are pension schemes doing enough to digitalise services and enhance member engagement?

While pensions administration software is a somewhat niche market populated with specialist software providers, there are a wealth of technologies which we can bring in to improve services for customers. Via Civica’s wide experience in emerging technologies and developments in our NorthStar lab, we’re now seeing the real benefits of artificial intelligence, chatbots, enhanced analytics and public cloud for the public pensions sector.

Here are four key areas which are set to enhance pensions technology and take services to the next level:

The impact of improving digital technologies

Accelerated digital pensions platforms can make services more efficient for scheme members and employers, supporting an end-to-end, collaborative approach. With more extensive online capabilities, scheme members can both see their benefits and edit personal data as well as initiating, tracking or completing processes such as ‘Retire Online’. By using this online retirement process, Essex Pension Fund realised significant processing savings, and by promoting the online channel, it eliminated time spent chasing members not ready to retire.

Improved online employer hubs allow employers and administrators to collaborate online, quickly solving issues and keeping track of all actions with a full audit trail. Chatbot functions on the online member portal allow simple queries to be answered quickly and at a time which best suits the customer.

Cloud is the foundation

Currently, around 50% of Local Government Pensions Funds still rely on on-premise administration systems. But we’re now seeing a rapid move to cloud solutions.

Cloud technology is a key enabler of digital transformation and can unlock the enormous value held in data. As a cloud-led business, our vision is to harness the potential of digital, data and cloud together to support our pensions customers’ digital ambitions.

We see the public cloud as an increasingly attractive option for customers with all the benefits this can bring; from lower cost and improved security and resilience to less of a reliance on internal IT resources. The cloud can empower users with a more flexible experience; from anywhere, on any device, at any time. It can help organisations to make the most of more efficient and renewable energy driven environments and reduce physical equipment.

Cloud is also the building block for a host of technologies including artificial intelligence and immersive tech such as virtual and augmented reality to improve the customer experience.

Automation all the way

With an increasing focus on governance, risk management and efficiency, the demands placed on pension schemes continue to grow. Member expectations for self-service portals go beyond this and improved service levels demand the correct technology to address the challenges of a modern pension scheme. Our recent contract with the Local Pensions Partnership Administration shows how introducing automation and self-service capabilities will significantly improve the user experience, reduce costs and backlogs. Automated processes and workflows not only eliminate human error, but also maximise control of risk, while giving peace of mind around compliance with government regulations.

The system can make decisions where accurate comprehensive data is available, reducing the need for human involvement. Civica’s Universal Pensions Management automation capabilities enable customers to adopt an ‘Administration by Exception’ servicing model; where work only goes to a human when something is missing, or the query is complex and requires input from a pension’s expert.

The next step is to harness artificial intelligence to offer even higher levels of automation at a lower cost. For example, we can enhance the member experience by using AI chatbots on online member portals to quickly address member questions.

Analytics are key

We live in a data rich world and this continues to grow at an exponential rate. Pensions software platforms gather vast amounts of information about members, employers and service levels, with every step of every interaction recorded.

With advanced analytics solutions built on the latest technologies, customers can now better understand this wealth of data and spot any inefficiencies or poor performance. They can then modify or further automate a process to resolve the problem, spot training issues or measure performance against agreed service levels and take steps to resolve where service delivered is not of sufficiently high quality. All of this will lead to more personalised and improved services for members and employers.

The proof is out there that improved technology platforms make a real difference to engagement. In fact, a recent survey by pensions consultancy Buck of 165,000+ pension scheme members showed digital solutions increase member engagement with pensions by up to 30%. This is backed up by our own research which shows two thirds of over 45s prefer to engage online. Developments in areas such as artificial and assisted intelligence and improved data analytics look set to take this even further in the future. With all organisations changing the way they think and operate, the steps taken by pension funds with new technology and innovation this year will impact their success into 2022 and beyond.