For me an interesting part of my work is how we might see open finance in the Long Term Savings sector develop over the next 5-10 years.  And who will drive it? 

Within government there is little to no enthusiasm for Open Banking and Pensions Dashboard governance to merge. So the question is does Open Finance in long term savings grow out of Open Banking or out of Pensions Dashboards?  

One is a DWP project, with the paternalism that the is the DWP default.  The other originally coming from the Competition and Markets Authority and driven by treasury who have a far more open market view. 

My perception from this end of financial services is that Open Banking is driven much more by the organisations that want to consume the data than those who hold it.  The whole point at the outset was to force banks to share their data. 

But Dashboard in part was driven by providers, in the private sector at least, actually wanting the service and by the DWP trying to up engagement.  Frankly within government and the regulators there is not a lot of trust in the motives of those who want to consume the data other than MaPS. 

If the Open Banking model takes the lead and moves into our sector I would expect that this leads to a bigger demand for wider data set and far less controls on how to use the data than we have seen on Dashboards to date.  It will want charges, investment information, transaction histories etc.  And it won’t have a problem with initiating transactions like consolidation or even drawing down from a pension.

It will also be less worried about legacy products and old DB stuff.  The market will chase the moveable money which is platform and modern workplace DC and mastertrusts.  Plus of course all those lovely ISAs and bonds. 

If its Pensions Dashboard that expands out, I expect that it will be slow and driven by specific use cases.  I would think moving into pensions in retirement and drawdown would be first.  Or slowly expanding the data set of dashboard, perhaps to include investment data. What I don’t expect to see is transactions for quite some time in that model.   Not unless there is a fundamental change in the view of when guidance becomes advice. 

My shiny pound is on Open banking becoming Open Finance and taking over.  Partly as it’s already out there and also is less driven through the cumbersome framework of government. Plus Dashboard is still a year or two away.  But mainly because its driven by the assumption that making the data more accessible is a good thing and does not need to be persuaded to do so.  

In fact it may be that in 10 years time Pensions Dashboards is legacy tech subsumed by the open finance wave. 

Whatever happens by the end of this decade open data will be a fact in our industry with all the impact that will have on advice, guidance, engagement and the pensions provider market.