Innovation is a mindset

Alison emphasises that innovation requires changes in how the pensions industry perceives and approaches technological advancements and believes that we’re already seeing a “significant” shift.

She states the importance of collaboration and openness to new ideas, saying, “We need to talk about it differently, because we overcomplicate everything”, and that by “simplifying communication and fostering a collaborative environment, you can drive the necessary mindset shift.”

Start small and scale gradually

Liam advocates for scaling gradually and focusing on long-term benefits if a scheme is to navigate the complexities of technological transformation effectively.

“My mantra on all of this is just start small, demonstrate a benefit, and then scale out”, highlighting the need for gradual changes rather than radical overhauls.

“It’s very easy to fall into the trap of saying we’re going to drive a digital transformation across a scheme, but that’s just too big. Schemes need to change the way they view and approach upgrades.”

He stresses that schemes need to “break it down, pick a process that is either super manual or hard work, and then look at automating that. By doing this, you demonstrate a sustainable business case to the trustees, and then you can keep automating your business one process at a time.”

Thoughtful change management

“You have to be brave, and you have to get started. Members are relying on us to do that,” says Donna, stressing the importance of careful change management and a conscious approach when implementing new technologies.

“People naturally don’t like change – even if you think you do, you don’t.” Donna encourages schemes to protect the knowledge and resources they already have, namely their staff, and get them involved at the very start of the decision-making process, and take them on the journey with you.

Amy points out the need for teams to be given sufficient time to implement technology in the right and safe way to build confidence and not rush the process.

“Enable us to take small steps and take things through pilots to get where we want to be safely.”

Value over bottom line

Amy emphasises the need to transform conversations around technology investments to focus on long-term benefits rather than just immediate cost savings.

“The operating environment that we’re working in is changing. There’s more that we’re being asked to do, so technology is a way that we can scale and manage the complexity of the work. That comes with the related cost savings.”

Amy also notes that an organisation needs to justify the cost and spread it over a period, and then leverage the outcomes it wants from the investment.

Better analysis and insight

“What we’re starting to see is the way that AI is being used to analyse large data sets and provide pension assistance to members”, says Donna.

This sentiment is echoed by Amy, who highlights the role of digital robots and automation in handling mundane activities, allowing staff to focus on high-value tasks, noting, “Robots and automation are doing some heavy lifting for us now, or some of the mundane, repetitive activities.”

Liam adds that “the technology ecosystem offers significant advancements grounded in reality, not blue sky thinking”, believing that the opportunities around data and self-serve are particularly exciting.

Biometrics and more assured validation

AI is already playing a significant role in improving member identification and verification, helping schemes quickly validate that people are who they say they are. In particular, biometrics is already making sure they’ve got the quality controls around that part of the process.

This is an area of interest for Amy, who highlights how tech innovation is already helping the West Midlands Pension Scheme demonstrate significant reductions in data cleansing.

“We have over 800 employers, and we get monthly files from each of them, so we’ve built in an increase of validations”, she explains. “Over the last 18 months, that has enabled us to see a reduction in 67% of the amount of work that we’re having to do in the back office.”

Liam explains that by employing biometrics solutions, schemes could see a significant reduction in work effort and an improvement in online member engagement by offering self-serve ID&V checks and full automation.

“In February 2024, Procentia worked with BT Pension Scheme to introduce a complete end-to-end online retirement solution for its members using biometric ID&V, enabling them to automatically instigate their pension payments”, he explains.

“In January 2025, it released a large data set showing that 65% of all retirement settlements were made online, with 75% of cases following the fully automated route. This equates to over one quarter of their annual retirements.”

Liam outlines that this resulted in “0% administrator work effort” required for the volume of online cases, and a 38% reduction in the retiree contact rate over the period. Ultimately, the member gets a seamless, high-quality experience.

Robots and chatbots

Following in the footsteps of digital banking, we’re starting to see schemes utilise chatbots and AI agents. But we’re not hearing much about the potential of digital robots, which use AI algorithms to mimic and carry out human tasks. Amy elaborates on how they’re already being used at the West Midlands Pension Scheme to do simple repetitive tasks.

“We’ve started small by getting them to send out reminder letters, reading information that comes in from a member, transferring that onto the system, then starting and undertaking processes.”

This is just the start of their journey. Amy says they will explore how other AI solutions can be utilised to achieve efficiencies, including within their call centre.

Balancing AI with human expertise

Despite advancements and the opportunities presented by AI, the transition from theoretical benefits to practical applications shouldn’t be at the expense of human interaction.

Liam is calling for the need to balance AI with expertise. AI should complement rather than replace human administrators, thereby ensuring that complex issues are handled by experienced professionals.

“AI can solve the simple problems, allowing the pension administrators to deal more effectively with business as usual, but we shouldn’t take people out of the equation. We need these experts.”

Colin believes that while AI can assist with simpler tasks, its ability to address complex issues remains limited, particularly in handling intricate pension queries.

“We’ve got to think about how we can use AI properly to help us through what is going to be a massive task across the industry.”

Regulatory and ethical concerns

Alison indicates that AI’s implementation must also be carefully managed to ensure compliance with regulatory standards and that “understanding the indirect risks posed by new technology is crucial.” She stresses the importance of collaboration between regulators and the industry to navigate these challenges effectively.

“What is the technology? What is it doing? What is the process? What are the controls, and then, what is it delivering?”

Alison continues, “The difficulty comes in understanding the indirect risks that could be posed by new technology, especially those we’re not familiar with. What risks are we willing to take, what are our tolerances, and what risks we’re not willing to take?”

Member trust and acceptance

Amy points out the importance of gaining member trust and acceptance in automated services, noting that the sector should “give us the time so we can do it right and safely.”

Understandably, rushing AI implementation for the sake of it without proper safeguards can lead to mistrust and resistance from members, so AI solutions must be reliable and secure to gain member confidence.

Meeting member needs first

Ultimately, members are expecting more from their schemes. They want to have greater levels of information at their fingertips and be able to self-serve on any aspect of their life. Yet low engagement with online pension services remains a significant challenge for some schemes.

Liam emphasises that investment in robust member communication strategies and education programmes is important to drive adoption beyond implementing user-friendly tech solutions that meet expectations and needs, saying, “You have to put the effort in and engage with them to make it easier to understand the benefits.”

Although there are doubts about whether the over-60s want to use online services, Liam believes this is a “myth” and argues that the appetite for interactive solutions is evident. Referring to BTPS’ self-serve online member retirement solution, he says the high engagement rate and a Net Member Promoter score of 98% were due to a comprehensive multi-channel member communication programme.

Creating opportunities for new talent

Amy adds that the skills required for pension administration are continually evolving, necessitating a change in approach to recruitment and training strategies.

“We’re looking at business analysts. We’re looking at people who can do Power BI data interrogation. This shift in skill requirements reflects the broader need for a mindset change to attract and retain tech-savvy talent.”

Alison comments that “at the end of the day, this is numbers in, numbers out, but look at where FinTech is now and digital banking. We already have some very interesting pensions propositions that are technology-driven, but there are fantastic opportunities for people to come in, build new innovations, and start from scratch.”

Liam suggests that schemes and organisations should look at apprenticeships, graduate programmes, and working with local schools and universities to promote the innovation and future opportunities a career in pensions can offer.

Retain knowledge and upskill

The panel unanimously agrees that while the sector needs a recruitment strategy to attract new people, it’s vital to marry new talent acquisition and skillsets with in-house knowledge and expertise.

“We should embrace the talent we have in place and help them shine”, says Alison. “Training and valuing the people already working for us will help them understand how their roles can evolve around the technology and possibly get them thinking differently. A shift in mindset.”

Amy agrees. “We’ve brought a raft of new skills into the business that we didn’t know we needed, but with any kind of change management, you’ve got to bring your people with you alongside bringing in graduates and apprentices.”

Donna quotes the adage that “once you get into pensions, you stay in pensions, and that no matter where you work, or your career history, you have a wealth of knowledge that needs to be retained.”  

Similarly, Liam highlights that “we have to marry existing pensions experience around technology implementation if we’re to get the best outcomes for members.”

Rip it up and start again

Colin concludes by accentuating that it’s all very well looking two to three years into the future, but the sector needs to be considering what the future looks like in 10 to 20 years. Schemes should determine what dangers exist if they don’t invest in all the areas discussed – digitisation, automation, member communications and engagement, talent retention, and recruitment.

“Someone mentioned rip up and start again”, he noted. “That’s absolutely key. We can look at the way we’re dealing with our processes, look at the way we’ve dealt with it for the last four years. But that’s not the way we’re going to deal with it going forward.”

“If we don’t invest holistically, what does the profile of your scheme look like at that time, and what do your members expect. Ultimately, we’re here for them.”