Digital, data and technology strategy

Paul Neville, Executive Director of Digital, Data and Technology at The Pensions Regulator, describes how the organisation will use digital, data and technology to transform itself and industry in a bid to protect savers and drive innovation.

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Dan Menhinnitt  0:00  

Hello and welcome to the latest instalment of Talk TPR. I'm Dan Menhinnitt, and today I'm talking to TPR’s Executive Director of Digital, data and technology Paul Neville. 

We recently published our digital data and technology strategy, a blueprint for enabling us and industry to adapt to, and embrace, changing technology and a changing pensions market to drive better, safer outcomes. 

Paul, before we get into the detail, let's cover off some of the basics. First, what is a Digital, Data and Technology Directorate?

Paul Neville  0:35  

Hi, Dan, it's great to be here and great to talk to everyone. 

So, we have three parts, digital data and technology. 

So, the digital part is all about how we design the services for the future. So, we think about our product portfolio, the list of things we could do, and then designing them in a user-centered way, to really think about who we are designing our solutions for. 

And then, the third thing is making sure we have a great technology roadmap and plan so we can be really thoughtful in terms of how we deliver so that's the digital side. 

Data is about well, that’s the information we keep, that's the lifeblood of the work that we do. And I consider us a data business, because we get lots of information in, we process it, look at it, and then we act on it. 

So, the Data team is absolutely critical for what we're doing now and for the future as well. And underlying all that is the technology platform, the skills to make sure we can all work and deliver incredible things in the future. 

And together, they're led by incredible directors who are really pushing us forward. And we have a vision that we can be a catalyst for pension innovation and regulator effectiveness, not just for us in TPR, but, actually, for the whole industry, and that's what makes it so exciting. 

We'd like to really revolutionise pension regulation, make it more efficient, secure, transparent industry and saver-centered. Our strategy, our DDaT strategy, really embraces the transformation of our world, our industry and our organisation. We're all connected, and we think that the opportunities that we have in the future are really incredible, and we should take advantage of those. 

We don't just want to keep pace with the technology changes that are available to us, as well as the way the whole world is changing and the pensions world. We really want to make sure that everything we do translates into meaningful outcomes for our savers and to deliver fundamental shift in how we operate as well. 

So, we want to shift our focus from not just completing tasks, we really think about the purpose, the outcome, everything that we everything that we want to do. We have a five-year plan. The way the whole plan is structured is there are essentially three horizons, and those represent a five-year plan. So, the horizon: One is one year, and then the next two horizons are two each. That makes five. And within those are some different missions which are all about the different things we want to achieve during those five years. 

Essentially, the idea is horizon one is the first year which we're in right now, and that's all about strengthening our core, enhancing our productivity, building our talent, creating standards, reusable architecture, optimising operations it’s basically the strong foundation that helps us deliver everything else. 

And I do want to say, before I go on to the other ones, that we are making great progress. One of the questions that I was asked is, you know, this is a very ambitious plan. How do I know that we can achieve these things? And I am confident, because as we're delivering these foundations, we are delivering some incredible things. 

Dan Menhinnitt  3:44 

So, bring us on to years two and three. 

Paul Neville  3:47

Now, year two is really about building. Years two and three, which is horizon two, basically, is our opportunity to focus on embedding innovation, expanding our capabilities. It's about better regulatory insight and decision making through automating: how we use our data, starting to bring in AI and transforming how we interact with schemes, making sure our collaboration with our data ecosystem, with the people around us, the stakeholders, government and industry, starts to work in a much better way. And we're drawing together all the different bits of information that we have to something that's very meaningful. 

That allows us to move into the third horizon, that's years four to five, to really start to be a real global leader in pensions regulation and outwardly driving innovation across our industry. 

Ultimately, what this is all here to do is make sure that, yes, digital data and technology, but us as TPR are really delivering the value that we're here to do for the saver. 

Dan Menhinnitt  4:55

So that's been a key tenet of what The Pensions Regulator sees its role as now. And the role of the pensions industry, which is to make sure that all savers get value from their pensions 

Paul Neville  5:05

Exactly. 

Dan Menhinnitt  5:06

Can you tell me a little bit about years two and three? You mentioned we would be looking at using AI appropriately. Where do you think that might come into the system? Where do you think that might be being used, or is it already being used here.

Paul Neville  5:20

So, we are already using AI. It's already in almost all the systems that you use today, certainly in Teams. If you've ever asked it to give you a transcript or sometimes it will suggest words that you might use in reply. I sometimes do that, and that's very helpful. That's all AI. We're used to all sorts of AI on apps on our phones as well. That kind of thing kind of exists already in our everyday work, everyday life. We, especially in our data science team, have already developed quite a few use cases for AI that we are using in operations. For example, how we're using statements on climate change. We are, instead of people having to read lots of information, we can now process that through generative AI. There also other examples in terms of how we're bringing in different types of data sets as market data to compare to scheme performance and to alert us to things we might be worried about. We have an LDI dashboard as well doing the same kind of thing. We actually have quite a lot of AI skills already. 

The opportunity going forward is to scale that, to find the really good examples that will deliver incredible value and insight, as well as automation into what we do. And the real thing to think about is this is not just us doing more of the same quicker, but in a more innovative fashion. That's an opportunity in itself, but actually thinking: “Well, if I knew these extra bits of information about schemes, about our stakeholders, what new insight, how differently might we behave, and what are those new opportunities?” 

And we are able, through this approach of starting with foundations, being clear about our data, our data ownership, our systems, our system roadmap, and actually we're able to start to do that in a way that can really scale and make a massive difference to how we work. And that's part of the opportunity with AI as well. We think we need to be a bit more outcome focused, and that helps us really think about what the data is that we really need and how we use it, and to be a bit more focused on the information that we ask for. 

We also think that we can change the way industry thinks about its own data. So, for schemes how they invest in their data. We would like them to adopt common data standards and then a certain amount of data can actually be shared in the open, because it's not private information or performance data. But we think the flow of data between us, between industry, can be done in a standardised way that will make it easier for us to just access data when we need it. 

For example, there is a world where it might be possible for us to interact in an automated way with administrators’ own systems. So, when we're not asking for data, it just flows between us in an automated way. So, we're not asking for more data, it kind of just happens. We think that world is possible. There is an example, a different industry, but an aligned industry, banking, where that kind of thing is starting to be possible. That's called open banking. So, we think there are opportunities here that we can copy from other industries.

Dan Menhinnitt  8:28  

And not just opportunities for TPR. It sounds like there might be opportunities for schemes as well here to gain richer insights that they can apply to maybe new products or things like that, is that the idea? 

Paul Neville  8:41  

Yeah, that's absolutely correct. First thing to say is that I, together with Lisa Allen, our Director of Data, we're going out to speak to industry, to schemes and other practitioners, to get their feedback on what we're thinking about. And what they want to know is: What more are you going to ask us to do, but also how can you reduce our burden? So, what we're looking for, to use a corny phrase, is a win, win solution where, yeah, we might be asking to do more, but they'll benefit as individual schemes and as an industry. 

So, the argument is that if we're good at this, we'll actually reduce burden, because right now, it's quite a manual process giving us data. So, if we can make that flow of information automated and easier, that would actually reduce burden. But not only that, it will give them the information for them to become more efficient as businesses in their own right. And thirdly, they'll start to have the information be able to share information amongst themselves to drive innovation, to drive new products that they can launch to industry. So, we think there are enormous benefits to industry for us doing this, and the benefit will then fall to the saver because they're better performing and the saver benefits as well.

Dan Menhinnitt  9:54  

And innovation is another key focus for TPR, isn't it? At the moment, we know we need more. decumulation products for savers at the end point. So, this is one of the ways in which we're helping industry to innovate and to provide those products that savers will need if they're going to get good outcomes. 

Paul Neville  10:12  

If you think about it, one of the challenges here we are looking for consolidation in the market. This does encourage that, because when you have to invest in administration, it works better in terms of economies of scale, but absolutely the ability to be able to share common data and performance for schemes means that we're also driving competition. So, it might be a slightly reduced or greatly reduced market, but there'll be greater competition within that market as well because of that free flow of data.

Dan Menhinnitt  10:40  

So, that does sound like it aligns quite nicely with our joint work with the FCA and DWP on the value for money framework, which is all about transparency and comparable cost services and charges. Is that one of the reasons why we bought this strategy in now? Because we want to deliver things like the value for money framework, and we need to get ourselves ready to be able to deal in this more transparent data space. 

Paul Neville  11:09  

So, I can't say that it's specifically for value for money, but value for money is absolutely an opportunity where we will be working in a new way. Value for money, if you think about it, is another data problem. You need information to find out, are you getting value for money? What is value? All those kind of questions as well as economic and policy questions, they're also data questions. So absolutely, there's an opportunity. And in fact, we have to be good, we have to be better, because there's a much more complex question, and because it's so important, again, it's about saver value. Do pensions give the right value to their savers, to the members of the pension schemes, to savers, ultimately. So that's what it's all about. So, we think it's a really good example of this in action. 

Dan Menhinnitt  11:55  

You mentioned earlier that you've been out to speak with industry about the strategy. What's their reaction been to it? Have they been warm? Have they been cautious? 

Paul Neville  12:05  

So, firstly, they are private conversations and deliberately so, and we're only at the beginning of that. In general, I would say, people have been very welcoming of the strategy and very excited about it. At the same time concerned about certain things. We've had some very, very honest conversations about where they think we should prioritise our effort. They are worried about the investment that they will need to make to deliver the strategy. They want it to go hand in hand with things like the pensions dashboards rather than an additional burden. And we agree with that. So, they want to make sure we are joined up. And one of the questions we ask them is, do they want to be engaged? And we will be setting up a working group, and everyone we've spoken to has said: “Yeah, we'd love to be engaged with we really appreciate being asked, actually, and being asked to contribute.” So, and that will be the approach that we'll take

Dan Menhinnitt  12:57  

It feels like a very much collaborative process with the opportunity for you to iterate the plan as we understand more about the transforming pensions market that we're seeing, the big changes we're seeing out there, from a move to fewer, larger, better run schemes. You mentioned you wanted to work with industry. What should pension trustees who have read this strategy do immediately after reading it? 

Paul Neville  13:25  

That's a good question. So, we will be engaging different interest groups, including trustees, in this conversation. We’ve already started that process, as I already said, and getting their feedback. So they should get in touch and tell us what they think. Tell us their concerns and get involved. There are stakeholder groups. Get involved in those stakeholder groups, because we'll be using some of the existing stakeholder groups as well to get people's feedback. 

I think they should be asking the schemes that they're managing: “What are we doing in terms of looking after our data?” Are we really up-to-speed? Do we really understand where the opportunities are and where the threats are? Because cyber attackers, for example, they're way ahead. 

So, we all need to respond. So, you know, I would, I would ask them to look at their own schemes, but engage with us, because we want to do this in a really supportive and constructive way. 

Dan Menhinnitt  14:27

All too often we see the impacts of cyber attacks on firms. Some have involved pension schemes as well. So, is this strategy an important way of putting in safer protections as well? 

Paul Neville  14:40

I think we talk about data sharing in this strategy, and one of the concerns raised with me is, is that a risk so clearly, whenever we do it's got to be done in the most secure way. With the latest cyber security that is our clear policy, that is exactly what we'll do. My point is that if you don't have a strategy, actually for your data, for properly upskilling your team, understanding AI, for example, because cyber criminals are using AI right now to try and look at your data. So, if you don't have that policy, if you're not skilling up your team, then you're already behind anyway, and actually carrying enormous risk. What we're saying is there's an opportunity for the whole industry to upskill together and to get benefit from it, as well as doing it in a secure way. Again, that's another win, win.

Dan Menhinnitt  15:31  

So, the world is changing, and the opportunity here is to change with it, or be left behind. 

Paul Neville  15:37  

Arguably, yes. You know, I wouldn’t use as judgmental a term as that, but we do think the world is changing. We think there's opportunity, and by taking the opportunity, you also deal with the risks as well.

Dan Menhinnitt  15:53  

Paul, I can tell there's lots more you'd like to say on this topic. I'm afraid we run out of time. Thank you for running me through the strategy. So, until next time, thank you, 

Paul Neville  16:04

Thank you.