Marie Walker: Security has been named as the public’s top priority for the dashboard in a recent Experian survey. What role does digital identity play?
Richard Howells: From a security perspective we all have the same problem – we all have 20 different passwords for 20 different online journeys for 20 different companies. The problem with those passwords is they can be derivatives of the same thing, so they’re actually quite easy to break, and once you’ve worked one out you can potentially guess several more.
From a security perspective, what you want is a solution which takes away the problem of having to maintain all of those different passwords. And at the same time it should give you more confidence that you – and only you – can get into your personal data. Those are the two elements that a digital identity proposition should be delivering for consumers.
“The message that came through from our research was that consumers want something that pulls together their immediate and longer-term money issues, helping them with both.”
Marie Walker: Experian have aggregated data propositions in other markets. What are the bear traps you’ve seen in other industries which we need to avoid to make the dashboard a success and allow consumers to get the most out of it?
Richard Howells: One of the first steps is that we should recognise that post-GDPR consumers have the right to question the accuracy of the data. Suppose the dashboard returns four pensions for you and you think one of them isn’t right. One of the services that needs to be built into a dashboard environment is who will pick up that query – is it picked up by the dashboard itself, is it picked up by the pension providers?
Somebody needs to pick it up and answer it, and the cost of that data query needs to be built into the overall commercial model. We know from running that service for other markets that a data query – if you can deal with them at scale, which we do – costs about £4 per query. With the numbers of people that are potentially going to use the pensions dashboard, that’s a lot of cost. So there needs to be some thought put into how that’s handled. Otherwise everyone’s going to end up with a lot of unexpected cost when we go live.
A second issue is what we call ‘fruitless finds’. The way the dashboard is currently configured, the first time you ask it to find your pensions, it checks with every pension provider – as it should – and you get your aggregated position.
Now, suppose three months later you want an update via the dashboard. With the current configuration, the dashboard will again go and ask every pension provider. 95% of them will come back with a nil return, like they did the first time. So you’re going to have millions of nil return requests being made in the industry, which will put stress and pressure into the system.
There’s a third issue. If people are going to return to the dashboard, the first time they visit it must identify all – or the vast majority – of their pensions, and do it quickly. If you’re a consumer, your digital experience is formed outside of financial services. Nobody likes to sit and wait for things to loads or process any more.
If you know you’ve got four pension pots because you’ve had four employers, but the dashboard only shows two because it couldn’t get a positive match for the other two, you’ll be disappointed – and you won’t return to the dashboard. And that means we end up building a huge white elephant that nobody actually uses on an ongoing basis. The matching process is right at the heart of whether the dashboard will be a success.
“When we asked customers how they think about money, it turns out – and I don’t think anyone will be surprised by this – that people don’t think about pensions when they get up on a Wednesday morning. It’s too long term.”
Marie Walker: The pensions dashboard has the potential to revolutionise the life and pensions market. Where else do you see this going – a financial management platform for all customers’ money, including ISAs, pensions, current accounts and so on?
Richard Howells: When you stand back from the pensions dashboard, you can see that this is another API into a broader open data environment, empowering customers with their own personal data to get value. So the customer wants to see how they can leverage the value of that data.
From our perspective that fits very neatly into some research. When we asked customers how they think about money, it turns out – and I don’t think anyone will be surprised by this – that people don’t think about pensions when they get up on a Wednesday morning. It’s too long term.
You don’t think “I can’t wait to get into work to put some more money in my pension”. What you worry about is things that impact your discretionary disposable income, day-to-day affordability. Can I cover the cost of my mortgage, can I afford to get to work, can I pay for the childminder, can I do this? That’s the really important stuff that dominates people’s ‘headspace’.
Part of the reason why people don’t engage with longer-term financial planning is because they haven’t got enough control and rigour around their day-to-day money. The message that came through from our research was that c