A survey by organisational consultancy Quint has suggested that nine out of 10 Dutch pension providers are anticipating fundamental adjustments to their IT systems in the coming years.
The company, which surveyed 22 providers, insurers and pension funds with in-house administration, found that they mainly aim to improve data security, following a shift to individual pensions accrual in the new pensions system, as well as make use of more flexible systems.
The providers intend to achieve their goals by using cloud services through outsourcing their server operations as well as developing or purchasing new software.
“Many plans target improving operational quality,” said Arno IJmker, partner at Quint. “The majority of participants in the survey cited this as the focus of their strategy.”
He added that this differed from pension funds’ aspirations, “who are often already focussing on the next step, such as better apps, financial planning tools and customer service”.
The consultancy further concluded that most providers found managing their IT suppliers difficult.
“Making sure that a supplier fulfills all of a pension fund’s wishes is a complex game, which not only requires IT expertise, but also commercial and legal knowledge,” IJmker explained .
He argued that guiding external partners would become more important, as the survey also revealed a trend toward increased outsourcing by parties still depending on internal IT systems.
The survey also showed that insufficient data quality could hamper the improvement of systems and achieving golas such as setting up financial planners.
According to IJmker, this doesn’t necessarily mean that a scheme’s data are wrong.
“The information could be insufficiently refined, or a pension fund could have poor access to the data,” he pointed out.
The study didn’t identify the participating players. However, inquiries by Dutch pensions publication Pensioen Pro in 2018, disclosed that APG, PGGM, MN and AZL needed significant adjustments to their IT systems to cope with individual pensions accrual.
At the time, implementing the changes would take up to four years and costs were estimated at up to tens of millions of euros.