The Pensions Regulator (TPR) interim director of supervision, David Walmsley, has urged pension schemes to "embrace" innovation and the data revolution.

Speaking at the Pensions Administration Standards Association (PASA) conference, Walmsley acknowledged that the pensions industry was operating in a "changing landscape, with fewer, larger schemes using scale to drive innovation and provide new products and services".

"Administrators have repeatedly told us the current landscape is really challenging, with growing compliance demands, recruitment and staff retention issues, and new technologies to integrate, as well as resource concerns," he continued.

Walmsley suggested that the solution to many of these challenges lies in new technologies, such as artificial intelligence (AI) and the digitalisation of administration.

"Many administrators have already started to embrace innovation, which has improved efficiency, transparency and accessibility services," he said.

Earlier this month, TPR launched a data strategy that challenged schemes to raise standards around data to improve outcomes and benefit the wider market through increased efficiencies, enhanced innovation, and reduced regulatory burden.

The regulator highlighted research showing that open banking has benefited the economy by £4bn so far, helping businesses and individuals manage their money in new and innovative ways.

Given this, it suggested that pension savers and schemes could similarly benefit from moving towards better data practices and taking practical steps towards open finance.

At the PASA conference, Walmsley reiterated this stance and urged the industry to "adopt modern data practices” to capitalise on the data revolution.

"The future involves sustainable, digitally integrated pension systems that prioritise efficiency.

"Investments made in data systems have a wider benefit and put the industry on a path to being properly digitised and data-enabled," he added.

TPR has previously pledged to reduce unnecessary regulatory burdens and improve data sharing as part of the government's broader plans to cut the administrative cost of regulation on business and drive economic growth.

Chancellor, Rachel Reeves, met with regulatory bosses on 17 March to reveal the action plan, which outlined proposals for a "radical shake up" designed to save businesses "billions" as more regulators are axed and core legal duties are streamlined.

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