Thomas, Baloise is currently experimenting with the development of a pension dashboard. What can we expect from this?
In very simple terms, it’s the first stages of development of what we envisage will be an electronic pensions dashboard that brings together the three ‘pension pillars’ – the state scheme, occupational schemes and privately funded schemes. The fact that it’s an open-source platform should make it possible to digitalise and summarise all this information about an individual’s pension provisions.
How did Baloise hit upon this idea?
The idea actually arose from the desire to make it easier to exchange data between different pension schemes. Currently, when someone changes job, a very complex paper-based procedure is set in motion. We want to replace this with a new, and far less complex, paperless process that is above all more efficient. From the perspective of completeness and ease of use, integrating the other two pension pillars is a logical extension of the initial idea.
If we all pull together, the pension dashboard has the potential to lay down a marker in our industry and usher in a new digital standard.
How would you describe what currently happens with pension schemes when someone changes job?
Slow and cumbersome are words that immediately spring to mind. Because not enough of the procedures are digitalised or automated, the way the pension schemes work together is unwieldy and takes up a lot of time. The old pension fund asks the employee for details of their new provider. The employee usually has to ask their new employer for this information and then pass it on to the old pension fund. Only then can the old provider transfer the portable benefit over. The two pension providers still enter much of the data manually into the relevant systems. A huge amount of paperwork is sent back and forth between the new employer, the employee and the pension funds. As the portable benefit is usually a large amount of money, everything has to be double checked before a transaction can be made. That ties up additional resources.
What are the advantages of the proposed platform?
The platform will serve as a kind of digital pension dashboard. Not only will it reduce the number of process steps, it will completely automate the transfer of data and funds between the old and new pension providers. Using technology to automate the process will make it much easier for pension schemes to work together and there will be far less likelihood of errors occurring. Every year, an average of 600,000 people change jobs in Switzerland, so this will take a huge burden off the current system.
The idea is for the platform to integrate the two other pension pillars alongside occupational schemes. This will add real value for anyone in Switzerland who participates in a pension scheme. They will be given access to a centralised overview of their pension benefits, payments and credits across all three pillars, which will make it easy for them to manage their assets and money.
OK, now let’s move on to the technical side. You describe it as an open source platform? What does that mean exactly?
Software can be described as open source if its source code is publicly available and can be viewed, used and even changed by third parties around the world. That might sound a little worrying in terms of data protection, but open source doesn’t automatically mean open data. Only the source code can be viewed, i.e. the text of the platform’s program. Personal data is encrypted by the pension provider and can be viewed only by people with the necessary authorisation. Data protection obviously has the highest priority for us in a project of this kind and is guaranteed at all times.
It’s worth noting at this point that blockchain technology could be used for this system. We built a pilot app last year to test this.
If the data is encrypted anyway, what is the point of the platform being open source?
We made a conscious decision to be as open as possible in order to win the trust of other Swiss pension schemes for our open source platform and to make as many potential partners as possible aware of what we were doing. Interested parties can also submit suggests for improvement, which from our perspective are very useful for the ongoing development of the project.
How far away are we from the project going live?
During a six-week workshop we took it to quite an advanced stage. We developed a minimum viable product and at the end of the workshop even presented a functioning platform – an unbelievable achievement in such a short space of time. We now need to demonstrate the idea and specific benefits, address the legal obstacles, which certainly can’t be underestimated, and – above all – get prospective partners on board.
So what has the response been like from within the industry? Are any potential partners lined up?
Encouragingly, several other Swiss insurance companies and pension schemes have already got in touch to register their interest. We are maintaining a dialogue with all of them, gathering information on their expectations, and reviewing the potential for collaboration. If we all pull together, the pension dashboard has the potential to lay down a marker in our industry and usher in a new digital standard.