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Smart: Making the Pandemic a Lesson for Legislative Changes

Have you noticed, many organisations continually run in circles when trying to align business and technology so they can work faster and smarter?

While technology advancements have enabled business agility, it is human behaviour that has often been the greatest barrier to actual transformation.

But suddenly everything is changing. The pandemic has almost overnight changed everyone’s lives – both personally and professionally. As a result, it has forced many companies to work with a focus and speed at which they have only previously aspired, to adapt and survive.

Over the past 12 months, executive and management teams have had to make many major decisions rapidly, often without all the information they would have liked. Whilst this may be a new situation for many, for those in the retirement industry this has always been a common occurrence but one that is also a constant challenge. While the pension and retirement industry is sometimes seen as slow-moving, external regulatory change often forces fast, sudden movement at a large scale.

A third certainty 

Continual legislative changes to a country’s pensions system are a given – they happen in every country in which pensions are provided or offered. It is such a foundation to the global pensions landscape that it could almost be added as the third certainty in Benjamin Franklin’s famous quote “nothing is certain except death and taxes” …and legislative change.

In the complex and heavily-regulated environment in which we operate, moving quickly in the pensions industry has always been a perpetual challenge. But often we are asked to. The need to change IT systems, operational procedures and propositions at very short notice, or sometimes with no notice at all, is something that we often experience and will continue to do so when the pandemic is long in the past.

Whilst many pensions and retirement regulators across the globe are actively starting to embrace fintech as an important way to de-risk the industry and help to engage with savers, they very rarely consider the cost and time involved in changing IT systems when announcing new legislative measures. In fact, they often argue: why should they consider it? Their focus is on the needs of the pension consumers – it is the providers’ responsibility to adapt to their announcements.

Legacy systems and basic IT compliance

As a result, many pension providers are still running on legacy systems with limited integration and little automation: Their IT roadmaps are often tied up with reactionary work to adapt to legislative change. They are often on the back foot and having to react to the changes announced by their country’s regulator. The demands on technical resource from regulatory change means that pension providers inevitably end up focusing on implementing tactical “fixes” to ensure basic compliance, instead of being able to review and innovate.

However, whilst technology has always evolved faster than humans, for the first time many companies are finally beginning to catch up.

There haven’t suddenly been new ways of communicating remotely or new artificial intelligence and analytics capabilities, all launching over the last year. Rather, the pandemic has forced people and companies to work differently. By doing so, some companies have quickly implemented the IT and operations needed to achieve the goals they have long strived for under the banner of “digital transformation”.

Future challenges

This is something that hopefully the pensions and retirement industry can take forward into the future and continue to develop for its reaction to future challenges including legislative changes.

As a global retirement technology provider focused solely on the pensions and retirement markets, Smart is often called on by pension providers to implement its software in these very short timeframes set by the regulator. Our platform is built from the ground up to adapt, with flexibility to regulatory change baked in. Over the last year, the shift within companies to recognise fast, customer-centric change is possible has benefitted us. We find ourselves now in an environment where rapid technological change has become a fact of life, and pension providers the world over are recognising they need systems that can react to change, but also deliver on the needs of savers for whom user experience expectations have been set higher by online banking, e-commerce, and the range of experiences they’ve had entirely digitally over the last year.

Because our platform comes both from the lens of user experience excellence and adaptation to changing legislative requirements, at Smart, we are able to pull together teams to create legislative solutions in a matter of days, while still delivering an exceptional experience. The knock-on of this is, when delivering solutions within days, feedback loops become quicker, enabling further improvement to happen faster still. Alongside that, our intraday release cycle time has drastically shortened the implementation of changes, meaning those who work with us find themselves going from in-house technology that always felt ‘on the back foot’ to technology that enables them to learn and grow, while still adapting to any outside change that may emerge. This is what the best digital companies do: experiment, fail fast, learn, implement rapidly and right.

Continuous improvement

This implementation approach has numerous benefits for our clients. It not only allows them to feedback to Smart straight away, away from the months-long or years-long development cycles they may be used to, but also ensures that the immediate issue of any legislative change is implemented early, and that their wider business can get on with providing their innovative propositions to savers.

From the numerous conversations Smart is having across multiple countries, it does feel that pension providers are realising that they can grasp the future now. They have viewed the art of the possible, some in response to grappling with rapid change related to the pandemic, and how it can be taken forward for better coping with legislative and market changes.

Similar to all businesses during the pandemic, pensions and retirement savings providers which have embraced new technology together with a culture of being agile and quick at adapting will be the ones that in future cope best with changes in legislation. They will continue to thrive on the road ahead with a more resilient business model and, instead of being reactive to changes in legislation, will become more proactive, more strategic, and more innovative. That’s something that will be good for pension scheme members across the globe. Those providers that are still adding “sticking plaster fixes” to their existing old retirement tech will continue the cycle of constant tactical changes and having to push innovation down the priority list.

Author

  • Smart is a global savings and investments technology platform provider. Co-founded in 2014 by Andrew Evans, Group CEO, and Will Wynne, Group MD, it is one of the UK's largest providers of workplace pensions.

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