Other parts of this series:
- Unleashing the intelligent pension agency
- Pension tension: Getting the physical/digital mix just right
- Citizen AI: People + machines = An enhanced pension experience
- Extended reality: A truly immersive pension experience
- Data Veracity: Everything starts with the data…so make sure it’s good data
- Frictionless Business: Sharing a single, trusted version of the truth with blockchain
Accenture’s vision around Frictionless Business considers how technologies such as blockchain are reinventing what’s possible when it comes to interacting with partners and creating new ecosystems of trusted, seamless relationships.
For pension agencies, sharing information reliably, accurately and securely between multiple parties is a fundamental requirement. Today, however, keeping member data up to date and accurate and sharing it between different parties, from employers to reciprocal systems, can be laborious, time-consuming and costly. One solution that you’ll hear more and more about to help address this is blockchain. It’s clear that blockchain promises to create a way to share information securely and reliably between multiple parties.
But here is where things start to get a little hazier. How does blockchain achieve the above (and more) and what type of blockchain efforts are we talking about? Some of the hype around blockchain can make it hard to establish a clear understanding. So, let’s start with establishing some key terms:
- Distributed ledger: This is a set of records that is stored and synchronized across multiple parties without a central authority governing how the data is maintained. Blockchain is a distributed ledger that securely stores transactions, with cryptography making each transaction record immutable. Each blockchain operates with an agreed set of rules – the consensus mechanism – that must be met before a transaction is recorded.
- Permissioned vs. Unpermissioned and Private vs. Public: Not all blockchains are the same. Some are “permissioned”, which means they have one or more owners who have exclusive rights to amend or add to the blockchain. Others are “unpermissioned” and open to anyone to view or add information. An example of the latter is Bitcoin. In addition, some blockchains are “public” which means anyone can view them, and some are “private” and can only be viewed by a permitted set of people.
Many retirement systems have hundreds and even thousands of employers who are part of their system. On a monthly or yearly basis, they submit data about members’ financial contributions. What’s more, members frequently transfer between reciprocal retirement systems. Their data must be transferred with them. But because there are inconsistencies in the way that each system manages, stores and transfers data, reconciliation challenges arise. A permissioned blockchain shared across those reciprocal systems could eliminate the need for reconciliations, as every system would share a single version of the truth that is simultaneously updated. That’s just one example. Others include payroll reporting, identity management and changing plan options. The overall point is that if you were starting a pension system from scratch today, you would use blockchain.
The ability to share data and information more reliably and efficiently is at the heart of Frictionless Business. And it’s not simply large businesses that will require that capability. For example, we’ve created an app for smaller businesses that gives them a new way to share information about their small number of pension system members. Whereas small businesses are used to spending considerable time on submitting data, they can now engage seamlessly with the relevant pensions systems at the click of a button.
If you haven’t already started, pension and retirement systems need to start investigating how blockchain could drive enterprise value by improving how they manage and share data between members, employers and other systems. Where do you see the most relevant use cases in your organization? I’d love to hear your views.
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