Centralisation vs competition #
The DWP's suggestions for delivering the pension dashboard contain a stark contradiction.
Open standards, competition, and innovation are valued highly by the DWP, yet many of the most important choices favour centralised funding, a single supplier, and centralised infrastructure.
A free, competitive market in technology becomes an impossibility due to the centralised infrastructure mandated (the single Pension Finder Service and, initially, a single dashboard). It will be necessary for most dashboard technology to be purchased centrally, which will result in the government and/or regulator playing a considerably larger role in the dashboard's delivery. This would increase consumer costs and stifle innovation.
A model that has previously shown to be successful in several financial services technology markets, such as Open Banking and TISA Exchange open transfers, is one that we would want to see implemented in the market for dashboard technology: an open, competitive market. This decentralization would foster innovation, increase speed to market, and reduce costs. No technology provider would hold a monopoly, and over time it’s likely that new vendors would enter the market, bringing innovative ideas for further evolution.
| Aspect | Centralization | Competition (Decentralization) |
|---|---|---|
| Infrastructure Model | Single Pension Finder Service and initial single dashboard | Multiple technology providers and dashboards |
| Procurement Approach | Centralized funding and procurement | Open market procurement |
| Market Dynamics | Limits competition, potential monopoly by a single supplier | Encourages new entrants and fosters innovation |
| Innovation Potential | Stifled due to lack of competitive pressure | High innovation driven by competition |
| Cost Implications | Higher consumer costs due to inefficiencies and lack of market forces | Lower costs through market efficiency and vendor competition |
| Government Role | Significant—government/regulator heavily involved in delivery | Limited—market-driven with oversight |
| Examples Supporting Model | Not specified | Open Banking, TISA Exchange |
| Market Evolution | Slow evolution, constrained by centralized decision-making | Faster market evolution with iterative improvements |
Fostering competition #
We all hope that the pension dashboard will serve as a launching pad for the introduction of more comprehensive services that will allow consumers to view all of their retirement funding—not just pensions—in one place. This view may even extend to their entire financial picture, which includes debts, insurance, investments, and savings. However, the centralised method that is being suggested will create a barrier to realizing this potential and discourage the introduction of new, creative players.
The now-abandoned Pot-Follows-Member solution was given the recommendation of an open and competitive architecture by the DWP. We urge them to reconsider the pension dashboard and provide an open and competitive environment that will foster innovation and give customers more options.
