Talking points and trends in pensions
Consumer Duty remains a priority
The small pots problem
The DWP estimates there will be 50 million dormant and lost pension pots by 2050[1]. These can be an administrative burden/headache as consumers behave differently with smaller pots, including simply losing track of them.
As the Consumer Duty Act continues to evolve with changes due this July, it will become a requirement for all pensions companies to be able to demonstrate complete account association across their portfolios and provide proactive customer communications.
A step forward is digitising communications. Whilst the current appetite for this is uncertain, there’s more acceptance of communication being digital-first, and eventually, younger generations (noted on the day were 18-25 year olds) are going to push for this to be the normality, especially in a world where the average UK citizen will move eight times in their lives, but will rarely update their pension provider making address details worthless in ensuring an ongoing, deepening relationship between pension provider and member. What’s more, paper communications are costly and do little to deliver against ESG ambitions.
Tracing gone aways
While adhering to Consumer Duty, it’s important to remember that reconnecting individuals with their deferred pension pots is essential and represents good practice for all records, not just dormant ones.
We can help you trace less engaged or gone away customers, enabling prompt repatriation of assets. Our tracing solutions can also be used to support your Collections teams in tracing debtors, or your Legal and Fraud teams with investigations.
Where needed, we can also supplement your own teams with experts in specialist data management and investigation services, who can help you cleanse and enrich data and locate difficult-to-find customers. Our comprehensive reference data, innovative techniques, and leading technology will significantly increase the likelihood of you being able to locate lost customers efficiently and manage your customer data more effectively.
Our market-leading solutions can help you with:
- Tracing individuals and larger batches of gone away customers.
- Identifying where customer records are out of date and could be enhanced by appending additional details to help you keep in touch.
- Managing your customer data continuously, reducing exposure to regulatory risks and improving your ability to deliver consistently good customer experiences.
New pension fraud threats and how to tackle them
No longer can businesses sit idle and say, ‘we don’t experience fraud’. The industry is starting to pay more attention to fraud and is starting to see, for instance, family fraud (continuing to claim payments when family member is deceased), account takeover, and synthetic identity fraud.
Companies that are beginning to understand and look at implementing recourses such as biometric verification and document validation are going to look strongest in the coming years with one foot ahead of the fraudsters.
LexisNexis® Risk Solutions has the luxury of being able to support you not only becoming digital, but protect you against digital threats.
LexisNexis® Risk Solutions Cybercrime Report
Learn how trust and collaboration are the foundations to fight fraud. Download the latest LexisNexis® Risk Solutions Cybercrime Report
LexisNexis® IDU®
LexisNexis® IDU® offers a flexible approach to identity management, helping you confirm identities online, comply with anti-money laundering requirements and protect your business from the threat of fraud.
Pension pot ownership
The government has recently re-energised efforts to deliver the Pensions Dashboard by 2026. For many this will be the first step into digitisation and accepting data from other companies to create a holistic customer view of their pensions.
As such, the cleansing and appending your data to be dashboard ready is only the first step any pension company should be considering. When the Pensions Dashboard goes live, how certain are you that you will have all the correct information, and every pension pot is allocated to the correct customer? We can help you build digital trust by helping you to verify that someone is who they claim to be – allocating any unclaimed pots back with their rightful owner.
The flexibility of LexisNexis® IDU® makes it possible for you to create a bespoke identity verification service to meet your requirements and manage through a single supplier relationship. LexisNexis® IDU® can find customers pensions, even for UK citizens living abroad.
Future fraud in pensions
We recently released our annual Cybercrime report that covers unique and actionable insights derived from the analysis of 92 billion global transactions processed between January and December 2023.
The report explores on multiple levels how digitisation in the Gaming/Gambling sector led to a surge in crime. Just like in Insurance, and in Banking before that.
We believe the next sector to be targeted in the same manner will be Pensions when the industry goes digital in the coming years. The report covers the types of attacks those industry organisations saw and the changing behaviours of fraudsters. It’s a read that will help prepare schemes, and act as a warning of the potential problems that await.
Working in unison
Ensuring effective collaboration between pension trustees and administrators is paramount. By fostering closer, ongoing communication and engaging in in-depth discussions about outcomes, we shift focus from mere surface-level considerations to a more comprehensive understanding of the pension landscape.
Bridging the gap between data attributes, we stand ready to address any disconnects, ensuring alignment with your objectives. Recognising the vital role administrators play in fulfilling legal obligations on behalf of trustees, cultivating a close relationship between the two parties becomes imperative.
Data
It’s not a new talking point, but a point that always deserves to be brought up. It’s apparent now more than ever that good quality data is key to running a scheme. As we are getting closer to the launch of the Pensions Dashboard, time is running out to get your data cleaned up into a clean, reliable, and dashboard-ready state.
Improving your data is not just for the Dashboard. Fixing your data can leads to greater automation, greater self-serve, and customer engagement – but it’s not a one-and-done process. A common talking thread is the requirement for setting up regular data cleansing. Whilst some schemes opt for annual data updates, we feel moving to monthly or weekly monitoring may be the way forward.
LexisNexis® TraceIQ®
Combining powerful linking technology and intuitive functionality with extensive data, sourced from a wealth of public records and multiple credit bureaus, LexisNexis® TraceIQ® is a market leading tracing and investigation web application.
How we can help
LexisNexis Risk Solutions can help in a variety of ways, depending on your challenges and requirements.
The use of LexisNexis® TraceIQ® can help resolve partial matches when the Pensions Dashboard comes in. Sourced from a wealth of public records and multiple credit bureaus, LexisNexis® TraceIQ® is a market leading tracing and investigation web application that enables our customers to build a full picture of the individuals they need to trace or investigate.
We can also support you with ongoing data management, helping to minimise the risks associated with data decay and assisting in maintaining up-to-date personal and contact information to enable regular contact with your full customer base.
What should your next step be?
Stress test the quality of your data with a complimentary data audit from LexisNexis Risk Solutions. We aim to find more than what others missed.
