Henry Tapper says proposals to tender the data architecture, putting one organisation or consortium as sole pension finder - are proving contentious
We are mid-consultation on pensions dashboards and there's public enthusiasm for the project. There is industry consensus that the Single Financial Guidance Body (SFGB) will incubate its dashboard in a controlled environment and that commercial dashboards will follow. But proposals to tender the data architecture, putting one organisation or consortium as sole pension finder - is proving controversial.
The consultation proposes following a conventional procurement process. Unsurprisingly this is supported by the consortium that built the ‘dashboard protoype' using the procurement model proposed in the consultation.
But a second proposal has emerged that would replace a single pension finder with a devolved obligation on each pension provider to build their own dashboard integration services, or cluster together around a new market of outsourced ‘integration service providers'.
Advocates of this second approach argue it would encourage innovation, create competition, be delivered faster and would not need a central procurement budget. They claim that by adopting the accepted data architecture of open-banking. This approach would avoid another central IT project for government to stumble over.
They liken this devolved approach to the way that railway companies competed and collaborated with each other to produce Britain's rail network in the 19th century.
The dilemma the government faces is that having proposed dashboards, it is reluctant to deliver them. Keeping the first dashboard and governance within SFGB keeps governance tight, but does the infant SFGB want to manage the largest data integration project the UK financial services industry has ever seen?
The second proposal actually reverts to the original vision for the dashboard (outlined by then-Treasury minister Simon Kirby) who advocated in 2016 devolving responsibility to commercial providers and "delivering a prototype within months".
Kirby may well have approved of calls from today's "pentechs" that providers agree to open their data to whatever standards are generally agreed (in return for getting access to that data themselves).
Pentechs want instant commercialisation, so that whatever they build, they get to use at once.
They point out that having built a prototype, it's time for the main event. They see the vetting of pension finders as a matter for the Financial Conduct Authority, who could use the existing Account Info Service Provider permissions. Co-ordination of these permissions could be put in the hands of the Open Banking Implementation Entity.
Since the dashboard was handed to the Department for Work and Pensions (DWP), Kirby's proposals have been reversed into a siding. The hope is that after the consultation, the dashboard will be back on the mainline. There is some hope that this will happen. Speaking at the launch of the dashboard consultation, the SFGB's CEO John Govett stated his intention to deliver at high speed. The SFGB must realise that the process laid out in the consultation is quite the opposite of Kirby's "dashboard within months". Procuring a single pension finder risks perpetuating recent frustrations.
The industry consensus will undoubtedly be for a conventional approach. It is the line of least resistance for providers that will not be challenged with compulsion for at least three years.
However, consumer expectations are changing, and having been promised a dashboard they are unlikely to be patient with the speed of delivery proposed in the consultation. The political imperative is to meet the expectations of the public and avoid another IT procurement shambles.
Speaking at the Tax Incentivised Savings Association conference, shortly after taking her new role at the DWP, Amber Rudd told her audience that she intended this to be a genuine debate with the government in listening mode. She will certainly get that debate.
Henry Tapper is director at First Actuarial and CEO of AgeWage
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