Michael Klimes explores the challenges to the rollout of biometrics in schemes and the benefits it could bring.
Biometrics electronically identifies individuals using unique features such as voice, fingerprint, facial or iris recognition.
The administration body argued the adoption of biometrics by schemes could drive efficiencies and better meet member needs in the long term - predicting that, as time goes on, this kind of technology would gain popularity and become an essential investment for schemes.
PASA chairwoman Margaret Snowdon believes biometrics is one technology among others that can help schemes deliver better services for members.
"Trustees should be interested in how members can engage with the scheme. Biometrics makes things easier for members, who would not need to send in valuable certificates to prove entitlement, for example," she says.
"PASA cannot dictate what approaches members use in running pension schemes but has recognised that technology will be very important going forward, given all the pressures on administration and value for money."
While Snowdon's intentions are laudable, practical questions remain about how a trustee board can adopt biometrics.
One company that uses biometrics and is keen on the technology's capabilities is Aviva. The use of fingerprint identification on its smartphone application, My Aviva, started in the last 12 months. The application allows customers to manage their money online. In addition to pensions it also covers investments such as ISAs and open-ended investment companies, life assurance, motor, health, home (buildings and contents), and corporate areas such as group health.
The insurer's head of policy John Lawson explains the firm's position on biometrics.
"Biometrics is one of the areas in which we are keen to invest. We have a fund of about £100m to invest in start-ups and this is one of the technologies we are targeting. It has a lot of uses in terms of member authentication and Aviva's platforms," he says.
"It is much easier to log on using biometric information. You don't have to remember passwords or go and find a 20-digit code. We are just using fingerprint to do that as we think it is sufficient."
Other areas of potential application include the pensions dashboard and pension schemes.
"It is a technology that is here, very customer-focused and provides greater security for members," Lawson says.
Trustees should also invest a degree of time to learn about it.
"They don't need to discuss things like biometrics at every meeting but maybe once a year. The board could bring in an expert, a consultant for instance, to introduce them to the subject," he continues.
However, even if trustees follow Lawson's suggestion about getting a consultant to introduce them to the subject, they do not have a £100m venture capital fund at their disposal to invest in the technology.
Association of Member Nominated Trustees co-chair David Weeks says trustees are open to technological solutions such as biometrics for two reasons.
"Quite a lot of boards find the record-keeping they have is not as effective as they would like for the tasks being asked of them. This is due to the pension freedoms and manual data collection in the 1980s and 1990s."
How can schemes explore the possibility of biometrics?
"My feeling is that trustees are there to exercise judgement and not be experts in particular fields. My instinct is that most trustees would want to rely on the expertise of their administrators to give a view on the effectiveness of biometrics and the cost of implementation. That is what I would ask on a board if I were looking at it," Weeks adds.
Arc Pensions Law senior partner Anna Rogers sees upsides to biometrics but has a warning.
"The use of data is more secure for members as long as the scheme does not lose it. If the scheme loses data on iris, voice or fingerprint recognition, then I suppose that is more damaging than if bank account, date of birth or national insurance number details are lost."
Dunstan Thomas director of retirement strategy Adrian Boulding is a supporter of biometrics but urges schemes to adopt it thoughtfully.
"My only word of caution for pension schemes is don't jump in too fast before the technology and a format are settled. Will the UK adopt fingerprint, eye, face or voice as our national biometric? We don't know yet, and those that spent lots of money on Betamax videos will remember the costs of embracing a technology too early," he says.
"What I am keen to avoid is the sort of thing that is happening in US banking, where rival banks are adopting different biometrics for competitive reasons. That's not in the consumer's interest, where a universally accepted ID is what's needed."
PASA's call for trustees to embrace biometrics is shared by others in the industry. It is already being used by one major provider - Aviva - which also wants to invest in it futher.
However, trustees will have to investigate it thoroughly and decide if the technology is worth the investment for the scheme's members.
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