Nes Technology is a software company that focuses on the lifeblood of pension providers – core systems. It has 15 people and has landed a significant account in private pension provider Skandia. So, how did they do it? How did a small team go live with Skandia in a super-quick 18 months? What makes them different from other software providers in the pension space?
The setting – a full-blown and modern core system
Nes Technology was founded by CEO Alfred Joensen in 2007. Back then, the company was just him, and it was an IT consultancy for the Danish market.
In 2013, the company began developing its core IT software, Polaris. “Every pension provider can use it,” says Joensen, because it contains a comprehensive overview of what providers need. Collections, trading, disbursements, policy administration, product configurations, pay-outs and more can easily be handled using the Microsoft-based, integrated, cloud-ready system. “It’s a full-blown, modern core system for the pension industry with a web interface,” he says, “everything in the system is APIs”. The system is also services-enabled, which means providers can build their own proprietary apps, or even a customer portal, within its confines.
Joensen made the foray into pensions because he saw a gap in the market while working as an IT consultant on core implementation projects for pensions. “The software was way too expensive,” he says, explaining that some of the projects he worked on costed companies billions of kroner due to lack of progress. “I also think it’s important that the money people save for their pensions should go to the savings and not failed IT projects,” he adds. Hence, he decided to do something about it.
Polaris is 20-30% the price of similar solutions for pension providers due to its less expensive hardware and software platform and the company’s efficiency in implementation, Joensen says, which slashes implementation times by a third.
The Breakthrough – Skandia
Given the conservative nature of the pension industry in Denmark, as it is in most other locals across the globe, it’s difficult for start-ups like Nes Technology to convince incumbents to purchase their core systems. Difficult, but not impossible.
Joensen says that they landed Skandia due to transparency, trust, and innovation. “We have a new formula for how to develop complex software,” he says. Part of this new formula is having a small, highly competent tech team to develop the software in place of the large teams germane to the industry.
IT projects, he says, are like Sudoku puzzles. “Imagine trying to solve a Sudoku puzzle by giving each person a square,” he says, “it wouldn’t work, but this is how most big IT projects function.” These projects have a lot of people working individually on a collective solution, with each person carrying out a specific task. Smaller teams, such as his, where everyone has complete idea of how the system should function and are highly-trained, are much more efficient and can communicate more effectively. “These small teams are normal in the gaming industry,” he says, noting how effective they are in developing products.
Skandia Denmark’s CEO, Pelle Wahlström, agrees with their approach, stating, “Nes technology is a different provider with an approach dissimilar to traditional providers. What they offer and the way they run projects is better aligned with how we see the world in the future.” He also says that their small, tech-heavy team listens and responds to their needs.
A look towards the future
One of the constant struggles is getting people more interested in their pensions, and core systems need to support this need, says Joensen. For example, Joensen suggests that pensions could be directly linked to debit cards and customer portals could have a comparative functionality where users can view how much others are saving, both of which would give consumers more control over their pensions. Greater control and transparency are important for incentivising people to become more involved in their pensions, so they can save for the retirements they desire.
Just like pension IT systems need to expand in terms of end user functionality, Nes Technology is also looking to branch out. Currently, interest has been indicated from a Japanese business and Nes Technology is in dialogue with entities in the Dutch market, which is suitable for the company because Denmark and the Netherlands have similar pension schemes. “We’d really like to find organisations with whom we can implement our software in the Netherlands,” says Joensen.
By Elliot Lyons, Research Analyst