The Dutch arm of leading global consultancy firm KPMG has published a new report outlining a novel automated concept to help pension providers better manage their clients pensions. Developed in collaboration with the firm’s IT provider, Cegeka, PIVOT is an acronym that roughly translates to ‘the Retirement Income and Capital Summary Tool.’
According to a newly released white paper by the Dutch division of global professional services network KPMG, the average Dutch citizen shows relatively little interest in retirement. This is hardly surprising, given the lack of information available to these consumers. Without a notion of their personal pension situation, consumers are unable to gain perspective or take proper action.
Now, KPMG is aiming to help pension providers turn this problem into a thing of the past with its new concept, PIVOT. PIVOT, or Pensioen Inkomen en Vermogen Overzicht Totaal in Dutch, translates as ‘Retirement Income and Capital Summary Tool.’ The development of PIVOT is the result of a collaborative effort by KPMG and its IT provider, Cegeka.
PIVOT is the result of two intersecting trends: (1) the EU’s revised payment services directive (PSD2), which will be officially enacted at the start of 2018, and (2) blockchain.
First, PSD2 paves the way for wider participation by non-banks in the payment industry. Although its focus is only on current accounts, this directive is expected to act as a catalyst on the road toward greater transparency across the financial sector, including insurance and pensions. The incentive for an open exchange of information and better transaction services will lead to more accessible and easily shareable information and value transfer between the various pillars of the Dutch pension system.
Second, blockchain technology makes it possible to share and integrate information from various parties in the pension sector and to automatically and reliably calculate the cost of pensions.
In an initial proof of concept, KPMG and its IT infrastructure provider, Cegeka, explored potential applications for PIVOT. With the aid of blockchain technology, pension information can be made available in real time. Real time data can then be converted into real time advice delivered via a mobile application. When this advice is combined with PSD2-inspired transaction services, the following applications can potentially be realised:
- If a client’s salary increases, PIVOT may recommend halting part of the pension
- If a customer gets married, PIVOT is able to inform him or her about the consequences of his or her pension
- If a customer who is employed with a pension plan decides to become self-employed, PIVOT can offer advice on how to prevent any potential pension gap
Considering these and other promising applications, PIVOT could potentially help the pension sector to diminish public apathy around currently available pension information. However, KPMG asserts that these opportunities will be lost if not seized. That is why it is challenging leaders from the Dutch pension sector take hold of this exciting opportunity and make the most of it. To conclude, the report expresses the hope that pension fund managers and other sector stakeholders will join KPMG in confronting these challenges.
To access the complete white paper by KPMG Nederland on its PIVOT programme (Dutch only), click here.