A Digital-First Approach Is Key to Scalable Pensions and to the PEPP Regulation / IORP II Directive Review
The need to create viable and scalable supplementary pensions is clear and urgent, but it cannot be achieved without a digital-first approach.
EIOPA recently published its advice on the revision of the IORP II Directive and the PEPP Regulation.
Initially, I only reviewed the factsheet and was concerned that it did not mention innovation or digitalisation at all.
However, the advice itself does briefly address these topics.
For your convenience, the main elements are summarised below.
To provide context, EIOPA is proposing a clear EU label (“EuroPension”) for the Basic PEPP to ensure its success.
To support digital innovation in EuroPensions, it is proposed to simplify the advice regime.
This would facilitate the development of low-cost digital distribution channels, which could improve uptake among younger or more digitally confident consumers.
It would also enable scalable and user-friendly distribution mechanisms, such as mobile apps.
EIOPA notes that a streamlined, intuitive onboarding process is key to supporting distribution via digital platforms, as a frictionless user journey can boost engagement among PEPP savers and drive broader uptake of EuroPension products.
- Standardised and User-Friendly Digital Interfaces
- Simple onboarding with clear step-by-step guidance for concluding a PEPP contract
- A low number of input fields and clicks to ensure a user-friendly process
- Mobile compatibility: optimised for smartphones and tablets to enable an exclusively digital PEPP offer
- Digital Identification and Onboarding
- eIDAS-compliant electronic identification and e-signature support to enable fully digital onboarding and contract finalisation
- Online e-identification tools should be made available to consumers
- Real-Time Customer Support
- Live chat or chatbot support for technical or procedural help
- FAQs and a knowledge base covering EuroPension, its rules, and digital usage
- Dashboard and Tracking Tools
- A simple dashboard showing contributions, investment growth, and withdrawal options
- Alerts and notifications for payments, policy changes, or milestones
These are all relevant points and indeed needed for consumer engagement.
However, I would personally be very careful about tackling this at the regulatory level (e.g. starting to regulate interfaces or the number of clicks).
If anything, this should be done through principles, as otherwise there is a risk of hindering innovation.
Having said that, I cannot help but think again about broader enablers such as Open Finance / Open Insurance and the FIDA regulation that can enhance these features.
Whether it is pension dashboards and broader financial health management tools, support on advice (both simplified or full) for non-EuroPension PEPPs, or simplified onboarding, data access regulations seem key.
Read more here.
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