The Pensions Regulator's (TPR) new data strategy has challenged the industry to 'raise its game' on data, in order to improve outcomes and benefit the wider market through increased efficiencies, enhanced innovation and reduced regulatory burden.

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

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

"The pensions system is undergoing radical change with greater data sharing and transparency, creating new opportunities for savers and the industry," the regulator stated.

"Savers expect their financial needs to be met, their data to be accessible, and their pension schemes to be transparent and accountable.

"Good, modern investment and governance decisions require high-quality, fully digitised data to avoid inconsistencies, increased costs and security risks."

In particular, TPR will be focusing on three key areas: Building strong foundations by implementing data principles; taking a wider data approach and reducing regulatory burden by creating an internal data marketplace; and focusing on adding value by making sure all the data collected is directly related to good saver outcomes and supports efficient and effective regulation, competition and industry innovation.

As part of this work, TPR will be looking to establish a set of data taxonomies and standards for open data exchange, and will be exploring moving from a system where data is sent automatically, to one where data is requested as needed.

In addition to this, TPR is looking to create a working group to help the pensions industry improve its use of digital tools, data and technology in savers’ interests.

It will also bring together pension and technology experts, along with professionals from other fields including to look at designing a framework for responsible innovation in pensions, which is expected to help speed up impactful innovations.

Alongside this, the regulator confirmed that it is looking to launch an artificial intelligence (AI) Advisory Council with internal and external specialists to ensure it meets ethical standards and regulatory obligations.

The strategy also urged pension schemes to safely adopt new technologies, including AI, aligning to the government’s AI Opportunities Action Plan regarding outcome-driven and inclusive AI adoption.

Commenting on the launch, TPR director of data services, Lisa Allen, said: “The world is undergoing a data revolution, and we want the pensions industry to capitalise on this — delivering more effective and efficient services, sparking innovation in service provision, and enabling savers to better manage and engage with their pensions.

“Today we have set out a blueprint to make this vision a reality and will now be working across the whole industry to drive consistent, coherent and, where possible, open standards for data on metrics that matter.

“This will mean higher expectations of the pensions industry, but also more modern data practices which will reduce regulatory burdens and enable more effective market competition.”

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