Standard Life has outlined plans to underpin a tenfold increase in
its business capacity through a series of IT initiatives.
Nick HuberThe mutual financial services company's ambitious expansion
plan, which includes a standard for transferring pension
contribution data, was prompted by intense competition in the
finance sector and the tight profit margins expected from the
forthcoming stakeholder pensions.
Industry analysts said Standard Life's targets were achievable
and added that other companies would have to follow the mutual's
example or lose business.
Currently a single group administrator at Standard Life can
handle about 900 policies compared to 3,000 policies for an
individual pensions administrator. Under Standard Life's new plans,
the number of policies handled by each administrator would rise to
between 5,000 and 10,000 for a range of pensions.
John White, executive chairman of insurance industry consultancy
Winchester White, welcomed Standard Life's IT shake-up.
"Its objective is along totally the right lines," he said. "All
[life and pension] firms need to improve their productivity by over
100%. But the devil will be in the detail of the
implementation."
When government-backed stakeholder pensions come into force in
April, pension providers will only be able to charge customers a
maximum of 1% of the stakeholder fund's total value - significantly
lower than the charges for other financial products.
"If we don't get market share and volume it will be very
difficult for us to compete effectively," said Alan Armitage,
assistant general manager for information systems at Standard
Life.
The technology underpinning the business drive falls into three
key areas: allowing customers to view and update their policies
over the Web; use of Internet data language XML as a standard to
transfer pension information; and the automated distribution of
annual customer statements over an extranet.
Standard Life is developing the XML data standard - based on a
specification developed by life and pensions standards body Origo -
to transfer company pension contributions as an automatic link from
payroll systems.
The XML link will save firms time and have an in-built section
for company pension leavers and joiners.
How Standard Life will use IT
- Allows customers to view and update policies over the
Web
- Uses Internet data language XML as a standard to transfer
pension information
- Automated distribution of annual customer statements over an
extranet link.