Big data surrounds the future of the pension industry to transform the quality of life for pensioners.
Big data technologies aim at storing, analyzing, searching, querying, and updating of large volumes of data along with maintaining the privacy. Big data exhibits the 4 Vs (volume, variety, velocity, veracity). Big data applications are innumerable ranging from banking, healthcare, insurance, and now the pension industry. According to the Bureau of Labor Statistics(BLS), 2 out of 5 older American households depend on pension as their primary source of income. This states the necessity of big data technology in improvizing the future of the pension industry.
Challenges faced by the Pension Industry
The information impending in the pension industry is wider than we think. Maintenance of data, including the self-invested personal pension(SIPP), planning services, state benefits, and much more is tedious. It is necessary to maintain logs, records, and assets of the pensioners accurately over a long period. Another challenge faced is security - an issue which needs to be resolved. All the personal identification and bank details need to be linked and used in a secured manner. The pension industry uses traditional methods, which cost the industry more. This case is again a leading concern for the pension industry, where large chunks of data need to be stored, analyzed, and processed at a high cost.
Future of the Pension Industry with Big Data
Big data technology has its hands into numerous fields, and is now proving to be a boon for the pension industry. One of the applications of data-driven technologies in the pension industry is w.r.t governance. This enables authorities in the pension industry to hear the voice of pensioners in an evidence-based and cost-effective manner. Moreover, automation powered by big data technology can be used for getting more transparent results, where employees from the pension industry will be assisted with everyday issues like adding new pensioners. This helps the management of pensions proactively. Fund design is another emerging application of data-driven technology, where membership can be categorized into segments based on the work cycle. A fund designer can use each segment as an input and check whether the final design is served accurately or not. Additionally, big data-driven technology helps in solving security issues. All of these applications highlight the significance of big data technology in shaping the future of the pension industry.
Big data technology has helped add productivity to various industries worldwide. However, unreliable data or lack of sufficient data sources may become an obstacle when implementing big data technology in the pension industry. Usage of appropriate big data technologies, along with relevant data will help the future of the pension industry to flourish and provide incredible economic safety to pensioners.