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Pensions think tank Netspar to branch out into big data

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Dutch pensions think tank Netspar plans to expand its work into data science and artificial intelligence.

In a recent newsletter, the network for pension researchers and professionals said that a working group would look into the impact of “big data” on pension contracts and market structures.

The working group – headed by Tilburg University’s Lans Bovenberg, professor of economy, and Bas Werker, professor of finance and econometrics – was to elaborate on a report about pension funds’ and providers’ expectations of big data, Netspar said.

Data science focuses on new ways of deploying data and “unstructured” information, such as text files, sound, photos, and videos.

“We expect that data science will affect the development of tailor-made solutions for individual participants at pension funds and increase the efficiency of risk management and investing, as well as supervision and policy,” said Marike Knoef, head lecturer at Leiden University, who co-authored the original report with Werker.

Talking to IPE’s sister publication Pensioen Pro, she explained that linking data such as postcodes and home ownership would enable providers to improve tailor-made solutions as well as communication.

Knoef argued that integral financial planning for an individual’s life course – including other assets on top of a second and third-pillar pension – was becoming increasingly important.

Knoef said that the exact task of the working group was not yet clear.

“We expect, for example, that a pension fund’s care of duty towards their participants will require much additional research,” she said. “We also assume that we can calculate the effect of a pensions system update on individual participants.”

Knoef added that the study could also provide useful information by analysing participants’ internet behaviour and that it could improve the understanding of individuals’ life expectancy.

She further pointed out that investors could use data science to identify links between market developments and certain events.

“Important to us, however, is to subsequently find an explanation for any link,” she said.

Last summer, APG, the €443bn asset manager and provider for the large civil service scheme ABP, announced that it would investigate the potential of blockchain and artificial intelligence in co-operation with Maastricht University and technical research institute TNO.

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