In the last few years, the rate of pension reforms in OECD countries has slowed down, according to the OECD. However, new technology, innovations and improvements in life expectancy and changes in the nature of work among many more factors should be driving forces behind constant developments in the pension sector. In this article we are briefly introducing how the pension landscape can take advantage of relevant developments to move forward from the current situation. A much more elaborate approach will be taken during the PensionTech Summit on May 17 in The Hague.
Currently, the pension sector is expected to adapt gradually onto new innovations. As innovation is developing rapidly, shifts in the sometimes outdated, current pension systems that we are used to are inevitable. For instance, the selection of pension funds by individuals themselves, instead of by their employer. Undoubtedly, new questions will arise in the coming years for stakeholders in this industry.
As companies in certain industries are obligated to take part in pension funds, the drive for pension companies to innovate is less present than in the other segments of the financial services industry. Additionally, pension funds are subject to many strict rules, reducing their breathing space when it comes to innovation. Unsurprisingly, due to the originally restrictive nature of the pension sector, pension companies are lagging behind banks and insurers when it comes to innovation. However, the upside here is that this allows them to learn from the mistakes and successes of these other sectors who are already realizing the potential of fintech.
These days, it is not only important for pension companies to prioritize technology and innovation, it is their responsibility to be aware of the innovative solutions currently available and the impact they can have on their business. A great part of pension funds is outsourced, consequently, being up to date on how their suppliers are dealing with technology and innovation is crucial as well. Currently, there are already a lot of fintech solutions on the market that can benefit pension companies, many of them already having proven their success in other industries. However, at the end of the day, to really innovate the pension industry, all stakeholders must commit to making a collaborative effort, including the regulators.
PensionTech Today & Tomorrow
During the PensionTech Summit on May 16 & 17 in The Hague, the future of the pension industry and the role that innovation plays in it will be looked at much more closely. In the morning, MN CEO René van der Kieft will take the stage together with the Chairman of Pensions Europe, Janwillem Bouman. They will talk about the developments in the pension landscape, how comfortable pensions can be secured and how PensionTech can help in all this. For more info on the event, please follow this link: http://www.pensiontechsummit.com
By Michael Brooijmans, Research Analyst