3 min read: New FCA and PDP consultations have been published on how dashboards must look and feel. We’re engaging with our customers and clients to obtain key feedback on these proposals and examine how they’ll really work for users.
By Richard Smith, Moneyhub Pensions Dashboards Strategy Adviser
It’s no secret that we’re massive supporters of pensions dashboards here at Moneyhub. We know that millions of consumers want to grow their confidence and gain clarity around their money for their later lives.
We’re an alpha partner to the Pensions Dashboards Programme (PDP) and we’ve shared our alpha dashboard for all to give an early view of how dashboards can help consumers and what they could mean for pension providers.
But what do consumers really want from a Pensions Dashboard? We’re committing to finding out.
From our extensive Open Banking experience, we know how important it is to seek feedback from real users on key elements of the UX (User Experience). Controls are vital for consumer protection, but they must also allow room for provider innovation to best meet consumers’ needs, so they can grow in confidence with enhanced overall financial wellbeing.
We really want to help ensure pensions dashboards land well for consumers. So, we’re going to ask some real consumers what they think about the FCA’s and PDP’s dashboards proposals.
Working with invited members of Moneyhub’s app user community, we will test consumer reactions to the various design controls being proposed today by FCA and PDP. We will also test these customer views with our corporate clients. All of this detailed intelligence will feed back into Moneyhub’s consultation responses back to FCA and PDP in February.
Whilst dashboards have been in the pipeline a while, much of the debate has been on scheme compulsion and compliance.
Now though, these two further consultations firmly put the spotlight on a third, and most important, “C” - consumers:
FCA are consulting on the draft regulatory framework for pensions dashboards: or, in simpler words, they’re proposing draft rules for how all authorised providers of Qualifying Pensions Dashboard Services (QPDSs) must behave towards consumers. This covers things like: What criteria must providers meet to get FCA’s permission to operate a QPDS? What must, and mustn’t, QPDS providers do? When can QPDS providers allow dashboard users to export their found pensions information? etc.
PDP are consulting on the draft Design Standards for pensions dashboards: In parallel with FCA’s QPDS rules consultation above, PDP is making proposals for how all QPDS providers must display consumers’ pensions. For example, on the list of users’ found pensions, in what order should they appear? And how should important contextual messages about the different pension amounts be presented on dashboards?
FCA and PDP will then review all the feedback they receive and publish final QPDS rules / Design Standards, probably in early Summer 2023. Moneyhub will then apply to the FCA to become one of the first authorised QPDS providers. Corporate clients will be able to use this dashboard, standalone or white-labelled, to help their customers see all their pensions together.
We know consumer confidence is low, and consumer confidence in pensions is rock bottom. Many consumers lack the ability and / or confidence to answer very basic questions about their pensions, such as: ‘What pensions have I got?’, ‘Will I have enough?’ and ‘What can I do?’
Dashboards will revolutionise pensions customer service: enabling consumers to do a secure digital search for all their pensions and then see an indication of their total pension position.
Users of the Moneyhub dashboard (standalone or white-labelled) will also be able to see their pensions within the wider context of all of their financial assets and liabilities, including investments, savings, property, loans, mortgages, bank accounts, credit cards and more, through Moneyhub’s Open Finance app.
Pensions dashboards present a generational opportunity to grow consumer confidence, but only if the mandated controls on, and design of, dashboards works well for consumers of different types. At Moneyhub, we’ll continue to ensure the voice of the consumer is heard, so that, when launched, dashboards offer consumers a truly useful service, helping them plan for retirement, and enhancing lifelong financial wellbeing.
In this post we continue to bust some myths and misconceptions we’ve heard around the implementation of the new Consumer Duty, and look at how Open Finance solutions can help firms achieve better customer outcomes.
In this post we’ll bust some myths and misconceptions we’ve heard around the implementation of the new Consumer Duty, and look at how Open Finance solutions can help firms achieve better customer outcomes.
Amongst numerous recent changes in our political leadership, Guy Opperman has handed the Pensions Ministerial baton on to Alex Burghart.
Like Guy, Alex is a keen Pensions Dashboards advocate and that renewed passion is really welcome. But it’s now more up to industry than Government to get dashboards done, as regulations are finalised.
Government passes the baton to industry: The Government originally handed the dashboards baton to industry in March 2016 when the Coalition Chancellor George Osborne said he would ensure the industry designs, funds and launches a dashboard.
Industry hands it back to Government: Industry took up that challenge enthusiastically, with the ABI leading a prototype dashboard project. The prototype was delivered at Easter 2017, with an accompanying report later that year. Crucially, the prototype report said that, for dashboards to be successful, Government would need to introduce legislation compelling pension schemes and providers to make their data available digitally for display on dashboards. Baton passed back to Government!
Government delivers it back to industry: That compulsion request was actually a huge ask, which Guy worked tirelessly to deliver over the last five years. A Government feasibility study in 2018, followed by a consultation in 2019, led to a Pension Schemes Bill in 2020, enacted in 2021, with secondary legislation being consulted on earlier in 2022. Very shortly, the Government will publish the final dashboards regulations (and accompanying standards), delivering on industry’s 2017 request for dashboards compulsion. This finally passes back the baton to us in industry to get dashboards done.
Whilst Alex finds his feet, there’s no need for a hiatus on dashboards. Rather, this now gives leading industry providers the opportunity, or duty even, to become the voice of change and drive better outcomes for consumers.
Industry mustn’t wait. Dashboards have cross-party support, for good reason: millions of Britons need more control over their futures, and soon. We should learn from previous initiatives, like Open Banking, where industry grasped the mantel and drove out the change.
Industry’s big providers should be encouraged to join Moneyhub in now testing the standards, and setting the pace for delivering the benefits to the consumers we all serve.
So how must industry now step up and deliver dashboards success? There are three crucial areas:
Data: Pension providers must comply by connecting up their data to the Government’s central digital architecture or equivalent alternative testing solutions. This starts with early volunteers this autumn. Then, from Easter 2023, all data providers must connect, in stages.
Consumer experience: At the same time, dashboard providers, such as Moneyhub, must test the most effective ways to display all the connected pensions data to many different consumers of different types, refining the alpha dashboards which are already in place.
Launch: Remember George? Back in 2016 he said industry must also launch dashboards. So whilst we’re busy getting all the back-end data connections and the front-end dashboards working correctly, we must also prepare for a highly successful launch to the general public.
Millions of people in Britain will finally be able to see their pensions together. If they use the Moneyhub dashboard they’ll be able to see their pensions alongside their other finances too. This will really help grow consumers’ control and confidence, much needed in times of financial stress.
Grateful thanks to Guy for getting us this far. Alex has a tough act to follow but a great opportunity to support the pensions industry as it embraces innovative technologies for the ultimate benefit of consumers.
It’s fair to say I’m not the world’s most patient person. My inner voice is constantly telling me “Not far enough! Not fast enough!” And indeed, our industry has seen real progress, but there is always more to do.
Our deeply-embedded mind-set has been to manufacture products and then find consumers to sell them to, rather than focusing on our customers and their wants and needs. But this is going to change.
I’m referring, of course, to the regulator’s Consumer Duty of Care. With the final rules published this week, implementation is due to take effect in April 2023 (or possibly later in the year if delayed), there are concerns over what additional burden regulated product providers will be required to shoulder. What we do know is that Consumer Duty will put big, expensive and, let’s be honest, pretty alarming responsibilities on any financial services business.
The new Principle 12 states that “A firm must act to deliver good outcomes for retail consumers.” No hiding places. No buck-passing. No closing the sale and walking away. If you serve the retail market, you must act to deliver good outcomes.
I simply cannot see how firms can meet their new Consumer Duty obligations without building their customer relationships around Open Finance and more broadly Open Data. In the old, soon-to-be-departing, product-centric world, it has been sufficient for firms to relate to customers purely in terms of the product/s they’ve sold to them.
But a customer-centric view of the world means taking a genuinely holistic view of your customers’ finances.
The kind of data insights necessary to recognise and meet customers’ needs – and to keep meeting customers’ needs over the lifetime of a contract – can only be derived from a platform that aggregates the customer’s financial position, and automates the analysis for both the consumer and the provider. Thereby positioning the right products and services to the right people at the right time to achieve better outcomes across their entire financial life.
This represents a 180-degree shift of responsibility. The onus is now on providers to tell their customers when they have something better or more suitable in their portfolio – and invite them to make the switch if they choose to do so.
Let's take one of the most simple and straightforward examples. If a borrower’s life was going well and the Loan to Value (LTV) ratio on their mortgage changed so that they became eligible for a better interest rate, a lender should, under Consumer Duty, alert them to a more suitable product immediately.
Providing the data-driven insights that can underpin individual, personalised propositions like this is at the heart of what Moneyhub does. And we can provide them either directly to the customer or, with the customer’s permission, to firms providing products and services, so they can create tailored communications and propositions to meet individual customers’ proven needs.
Moving towards an Open Finance-based, data-driven, customer-centric model is wonderfully, transformationally good for business, good for profitability, and good for efficiency.
We’ve come a fairly long way, but there’s a long way still to go – and the next leap forwards is the move to aggregating individual customers’ data, from banking and pensions to loans, investments, mortgages and properties, and making use of the insights it just can’t stop providing.
Consumer Duty certainly presents an alarming array of demands and challenges, but it also presents an even broader array of fabulous opportunities, and these need to be embraced.
So, my plea to the industry is to take this seriously, let legacy thinking be legacy and consider how you can take this regulation and turn it into a real opportunity for your business and your customers. The results will be truly fantastic when the hidden value in your customers data is unlocked to achieve better outcomes for all.
Worried about complying with the new regulations? Check out our Consumer Duty resources or get in touch to explore our solutions.
The Financial Conduct Authority’s (FCA’s) new Consumer Duty regulations are due to be published at the end of July 2022. FCA regulated businesses have been given notice that between then and April 2023, when the rules come into effect, the FCA will be looking for evidence of progress towards compliance.
The regulations aim to raise the bar on Consumer Outcomes beyond Treating Customer Fairly and will require businesses to deliver appropriate communications; suitable products and services; good quality after-sales care; transparent pricing and value for money. Businesses must demonstrate suitability from the point of sale and throughout the lifetime of the contract.
An important driver of change for the FCA is the continuing divide between the knowledge of the seller and the buyer - the asymmetry of information - and the exploitation of this by some businesses. Not only is this not good for the consumer but it is also bad for the provider and could collapse a market if unchecked. However this opens up significant opportunities for businesses who can differentiate themselves with much more targeted propositions.
In the financial services market, consumers are not well informed on the whole and providers have limited knowledge of the circumstances and appropriateness of what they sell. Despite fact find and risk assessment processes, consumers are often still mis-sold and end up mis-buying. Even the minority using financial advisers are affected.
With Financial Ombudsman Service complaints up over 90% year on year in investments and pensions and 66% for banking and credit, the market certainly looks headed for something similar to a collapse.
The first of the four key consumer outcomes the FCA wants to address is ‘Communications to equip consumers to make effective, timely and properly informed decisions about financial products and services’.
Consultancy Hymans Robertson highlighted that the biggest challenges for businesses in implementing and demonstrating compliance are:
Accessing data on historic product sets
Identifying the characteristics of end customers without direct connection
Having the right skills, experience and resource to implement the changes needed
During the FCA consultation on Consumer Duty, Moneyhub identified Open Finance as the solution to help prevent a market collapse, bridge the disclosure gap, and to significantly reduce the cost of compliance.
In addition, it opens new opportunities for businesses to use consent-based consumer data to identify and develop new hyper-personalised products based on needs and behaviours.
With ongoing engagement, it provides a means of identifying early warnings of issues and the ability to act to limit detriment using an evidence base. The list of behavioural insights provided would be significantly enhanced by the adoption and facilitation of Open Finance powered tools.
Moneyhub’s Open Finance Technology can:
Aggregate account information from the widest range of sources in the UK - 200 UK financial institutions and 700 products plus international account aggregation
Analyse and categorise income and expenditure and create a net worth position from both connected and manually input assets and liabilities
Evaluate historic transactions, build budgets and forecast cash flows
Identify vulnerability of potential consumer through behaviours, transactions and financial decisions
Detect changes in personal circumstances through connected accounts such as cash movements, changes in income and payment commitments or account closures etc
Provide content and notification nudges to consumers to improve outcomes and address changes, as well as alerting the client’s trusted advisers if intended outcomes are no longer relevant or achievable
The value exchange between a consumer and an adviser or product provider is not a one-off event at the point of a product sale - it is the foundation of a relationship and requires ongoing suitability checks. Users can share their data with advisers, solicitors, accountants or family members (especially valuable with vulnerable customers). They can connect accounts and consume personalised content in multimedia forms, from texts to pension rap videos!
Holistic financial wellbeing can really only be achieved through Open Finance and the two-way exchange of information and insights aimed at improving consumer outcomes. The dividend for the supply side of the market comes as lower acquisition costs; higher retention levels; reduced compliance issues; improved data gathering; visibility of advised and non-advised assets and liabilities and productivity gains from the automation of suitability checks and helpful nudges.
By adopting Open Finance, businesses can ensure that they are exercising appropriate governance across the value chain. Moneyhub’s Open Data powered technology has Consumer Duty compliance baked in. And, the added benefit of unlocking opportunities for businesses to develop hyper-personalised products based on consumer needs and behaviours to fuel growth. It’s win-win!
Worried about complying with the new regulations? Check out our Consumer Duty resources or get in touch to explore our solutions.
Open Finance builds on the foundation and legacy of Open Banking, which has shaken up the world of current accounts and payments by opening up data for regulated providers, like Moneyhub, to access and share data, subject to customer consent. Open Finance extends those data-sharing principles to a consumer’s entire financial footprint, including their mortgages, savings, pensions, insurances, investments and more.
There are few areas of the financial services industry that haven’t been touched by Open Banking. Open Banking is when people give consent to third parties like Moneyhub, to access their banking data to benefit from smarter and more tailored products and solutions.
Moneyhub and EXL have today launched ‘The Road to Open Finance’ white paper, which explores the opportunities that Open Finance can present to the insurance industry.
Whether you want to create your own solution, or you want us to do it for you — we have the technology for it. Our experienced team is here to support you now and in the future.
