Member tracing: Administrators put hopes on new email and mobile phone data
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A new market entrant has started offering access to its database of email addresses and phone numbers, and at least two administrators are testing this with schemes. Will digital contact details revolutionise member tracing?
When they were introduced, the Pensions Regulator’s requirements on common data such as addresses increased trustees’ focus on keeping this type of data clean. Schemes have to report their scores annually in the scheme return to TPR.
Emails and phone numbers have longevity
Some administrators are now focusing more on email addresses and phone numbers to try to automate data checks and minimise the number of members whose contact information is lost. This kind of information used to be much harder to come by than postal addresses but change less frequently. New players like identity verification service GB Group have started giving access to their databases to pensions administrators.
“Traditionally you find out you can’t get in touch with somebody, and you have to trace them,” explained Simon Rance, a director in the outsourced administration business of Willis Towers Watson, using third parties that offer a variety of technological and human options like directories, registers. However, “as you can’t find people, it becomes quite expensive”, he noted. The cost of tracing someone who has emigrated to the US, for example, could be more than £100.
Rance said his firm is now trying to be more proactive about staying in touch, using GBG’s database and a four-step plan, which starts with a ‘living as stated’ exercise - more akin to the traditional postal address check - which is repeated every two years. Then the firm will do searches on databases in bulk to check if email addresses and mobile phone numbers are still active, before running addresses through a care facilities database and checking address searches from the land registry to see if a property is about to change hands.
With the email and phone check, “if they are not active, we can search for new email and phone numbers,” said Rance, giving the administrator a faster way of getting in touch with members.
While people move house, nowadays their mobile phone numbers and email addresses tend to remain the same for long periods of time, so having them allows administrators to keep in touch with a member who has forgotten to tell the scheme their new address, for example. What is more, this tends to be the case even where a member has left the UK, as people tend to keep their digital details the same for at least a year or so after emigrating.
Using such databases to proactively check the membership data is “still very, very new”, Rance noted, and therefore also “a new way of thinking for trustees” as opposed to the more reactive tracing route. “This is more digital and automated. It will take a little bit of time for everybody to understand that by updating the privacy statement, we can look at more digital databases,” he said.
The new way of searching requires getting people comfortable with the digital aspect and reassuring them that data is hosted securely. “This is in no way about profiling people or taking automated decisions. It’s all about getting better data, and people will have a look at what comes back,” said Rance. “The data sets are there to be used by the right parties. It can provide many advantages," he added, noting how identity verification has already changed in other areas of life.
Take-up by pension funds has been low so far, he said, attributing this to the fact that the concept is new - WTW started using its four-step plan three or four months ago.
Trustees cautious over verification
Like WTW, Trafalgar House Pensions Administration is also looking at making greater use of email and phone numbers. Finding members is easier than it has ever been, said client director Daniel Taylor, with low-cost solutions and sophisticated databases available.
“It used to be a very manual, paper-driven exercise, all through the DWP tracing service. Now there are so many more sophisticated data sets in the market,” he said - including providers that can search for and supply email addresses and mobile numbers. “That's pretty new as services go. Most tracing agencies focused on postal address because that’s the most broadly available data you can get,” he said.
With email and mobile phone numbers, the main problem is their validation and verification, particularly in the current era where fraud is relatively widespread. However, new market entrants have “pretty sophisticated technology” to verify this data, mainly by tracing financial transactions – companies with access to emails and mobile phone numbers tend to be payment intermediaries.
“If a person has used that email for an online purchase... and they see that data item appear multiple times for the same person, there is a high likelihood” that the address is linked to them, Taylor explained.
THPA is also trying this out with a client. “I have just tried testing it with trustees, we just very recently performed that exercise because a new client wants to start the admin service with a large digital footprint for the membership. They want to look at how they can harvest that digital contact information above and ahead of residency [data],” he said.
“We are very interested in it because if it proves as successful as some of the stats show, then it will dramatically increase the level of digital contact we have with members, and by extension we’ll reduce our operating costs,” Taylor explained, as relationships with schemes start with a much broader paperless service.
However, there are “definitely reservations among trustees”, he agreed, because the technology and data are new.
“The key issue is, how you can independently verify that an email address is the accurate one? There are ways to do that,” he argued, for example contacting the email address and going through a verification process with the holder.
Trustees urged to look at data cleansing as an investment
Other ways to harvest email addresses and mobile phone numbers are schemes trying to get members to update their own details.
“Tracing agencies would use just postal addresses, they are easier to verify,” said Chris Tagg, a partner at Barnett Waddingham who is also a board member of the Pensions Administration Standards Association. PASA has produced its own guidance on data management.
“When you look at other contacts like email or phone, the scheme will engage with a member and try and drive them online,” Tagg said, to try and get them to update their own records.
Data standards went up when TPR introduced its record-keeping guidance. However, since then, things have slowed down, he remarked, unless a scheme is looking towards its endgame or planning a liability management exercise. This slowdown in data cleansing is down to cost and capacity in the industry, he suggested, which will worsen as schemes implement GMP equalisation.
Tagg urged schemes to look at data cleansing as an investment rather than a cost. “It’s much better to be proactive than reactive” and having to fix things that have gone wrong, he added.
