Heywood
The best way to ensure the accuracy of member data is to implement a data cleansing strategy, based on continuous monitoring and improvement of data. The Regulator, other major pensions industry bodies and experts like Heywood all urge schemes to integrate this strategy with business-as-usual activities. This not only helps increase the efficacy of the strategy, it also contributes to reducing ongoing data management costs.
“It’s worth putting in that time and investment now – doing that work up front should pay dividends in savings later on,” says David French, head of data and analytics solutions at Heywood.
Why a proactive approach to member data management is smart
What should the data cleansing strategy look like? Many schemes now carry out mortality screening on a monthly basis; Heywood recommends reviewing address and other member data just as often. We suggest a monthly data cleanse, based on a high degree of automation. Parameters of the strategy should also be reviewed continuously.
“If you make improving data quality a continuous process that runs in the background, integrated with business-as-usual administration, it becomes part of your core operations, rather than data being a separate subject,” says Heywood chief operating officer Louise Donohue.
Chris Connelly, Heywood Chief Strategy Officer, agrees: “It makes data the living heartbeat of your administration rather than something that ‘needs fixing’ now and then.”
Louise Donohue points out that when implementing this sort of strategy, a scheme moves from being reactive to proactive.
“I think historically people have focused on bailing out the water, rather than fixing the leaks,” she says. A proactive approach should be based on analysing sources of data used by the scheme and evaluating reliability of those sources; and how effectively they can be used together.
A strategy should be specific to a scheme’s specific requirements, as this will allow actions to be prioritised, and the most urgent or risk-increasing issues tackled more quickly.
Engaged members are the key to better data
An ongoing data cleansing strategy should also be supported by use of digital technologies to enhance member communications and engagement, in part by asking members to help check the accuracy of their data. This helps reduce administration costs by removing waste; and it encourages member engagement, offering further benefits for members and scheme.
Email is now often a more effective tool for driving engagement than posted material. Members can be prompted to use online self-service portals to confirm, amend or add to personal data. If a scheme holds both an email address and a mobile number for a member, there is no need to continue to communicate with them using paper-based methods (unless this is the member’s preference). Portals can also be secured using digital identity verification methods.
“Email is really cheap, much faster than the post and can additionally be delivered securely,” says David Rich. “It shouldn’t be too time-consuming to ask people to register and update their details.”
The link between self-service and data quality
Heywood’s analysis comparing numbers of scheme members whose email addresses are held by the scheme and numbers of members recorded as “gone away” shows that if a scheme holds a member’s email address that member is much less likely to have gone away.
In addition, when Heywood analysed the numbers of members in schemes with different Pension Regulator common data quality scores who were accessing self-service portals, we found service portals, we found a positive correlation between a higher common data quality score and the percentage of members who had logged onto a scheme’s portal within the past year. This suggests that a scheme with more engaged members who use self-service in this way is less likely to have missing or invalid member data.
Growing numbers of schemes are using personalised video communications to inform members about their benefits during the run-up to retirement, rather than posting paper documents that members may not always read properly or may find it difficult to understand.
“Heywood's video content uses AI to generate an avatar that delivers a personalised walk-through of the member’s benefits,” says David Rich. “It can be tailored to the member’s own circumstances and delivered in their preferred language. To have a friendly face, talking in a natural way, explaining things to you, will deliver levels of engagement that will otherwise never be obtained. And the cost is greatly reduced through use of AI.
“Once you’ve got a member engaged it’s a lot easier to keep them engaged,” he continues. “Everything becomes much more frictionless. Things that used to be really hard to do are now much faster, easier and more cost-effective; and engaged members are less likely to mistake genuine communications material for potential scams.”
This article is based on insights from Heywood’s Pension Pulse, a landmark report analysing 3-million-member records across nearly 70 UK pension schemes. Read the full report.
