Exploring ecosystem models in payroll, identification and authentication, transfers and document verification via APIs
Pension providers can participate and contribute in third-party ecosystems by leveraging other partners’ capabilities to enhance their customer experience, without having to build infrastructure and capabilities in-house. By embracing an open API architecture, these firms can instead partner with TPPs, facilitating the rapid integration (plug-and-play) of their own and fintechs’/TPPs’ service offerings.
For instance, AXA Singapore has also launched an insurance-as-a-service API to make it easier for digital channels to integrate their products.
1. Payroll integration
Typically employers spend a lot of time and energy in sharing their employees’ data with pension providers manually for contribution deductions. This can easily be automated by way of payroll integration.
Payroll integration implies automated movement of employee data to pension providers for contribution deductions. This integration is essential to increase the productivity of employers, thereby reducing time wastage due to manual uploads, leading them to concentrate on their core. It can also help pension providers stay ahead of their competition by providing employers with plug-and-play data integration solutions, where the data can seamlessly flow in both directions from employers or payroll firms to the pension providers and vice versa. If employees make any changes to the pension providers’ websites to edit their contribution rates, etc., that gets reflected seamlessly into the employer or the payroll’s records with the help of APIs.
2. Identification and bank account verification
When members submit requests to withdraw funds from their pension pots, the pension provider does some authentication checks to verify the authenticity of the member and also does the bank account verification of the members before transferring the funds to them. The authentication step is mandatory since the pension provider needs to be sure about a member’s identity and the authenticity of his or her bank account before handing over the retirement proceeds to the member.
This leads to the enhanced turnaround time for the entire process of withdrawing/ transferring funds, thereby leading to members’ frustration and a rise in the number of calls to the providers for updates on their withdrawal/transfer requests.
In order to do these verifications, insurance providers can enter into tie ups with authentication services providers instead of initiating the verification procedure from scratch by themselves. Their systems can be integrated with the service providers’ tools with the power of APIs.
For instance, Experian gives the ability to provide electronic authentication decisions in real-time without the need for paper-based proofs, which contributes to achievement of the required end-to-end processing times and customer outcomes. The advantages are abundantly clear: faster verification for members, while for pension providers, less time spent on verification means more time to understand members’ needs, provide a better experience and engage in strategic initiatives.
3. Transfers between pension providers/annuity providers
In cases where a member wants to transfer pension funds from one pension provider to another or to an annuity provider, either to consolidate their pension funds or to start an annuity - typically such transfers take a lot of time. In order to save members’ time to facilitate these transfers from one provider to another, pension providers can take help from TPPs providing transfer services with the power of APIs.
Pension providers have understood that in order to survive in today’s competitive environment and to improve their member outcomes, they have to provide services at an exponential speed to members. There is no tolerance for delays in processes, be they withdrawals from the member’s pension pot or transfer to other pension/annuity providers. Hence there is a need to explore ecosystems in the market to reduce the turnaround time for transfer-related activities. Pension providers can get into tie-ups with the TPP, providing these services rather than doing the transfer from scratch. This will ensure that the consolidation of members’ pension pots can be achieved in a short time span.
For instance, Origo Transfer Service can help facilitate these transfers among pension providers or annuity providers with a considerably lower turnaround time and less paperwork hassle by simplifying the re-registration process. It provides a fast, secure business-to-business exchange of data between ceding and receiving schemes. Origo has been an industry leader in providing the service for transfers and has been specifically designed to make it easier to transfer pension benefits between schemes. This enables a reduction in completion times for pension transfers across the industry, and smoother communication between organisations by providing both schemes with detailed contact points, real-time messaging, MI and paperless processing.
4. Document verification
Typically pension providers require members to share their identification proofs, etc., in case they want to withdraw/transfer funds, make updates (address change, contribution rate change, etc.) to their existing pension accounts. In some cases, members are asked to upload their ID proofs and send them digitally. In such cases, a lot of frauds have been noticed.
Therefore, in order to avoid any fraud, it becomes imperative that pension providers authenticate these documents via an AI-enabled identity document verification tool. There has been a considerable rise in online transactions due to COVID-19, thereby leading to a rise in fraudulent transactions, too, wherein fraudsters have been uploading fake ID cards to either withdraw money from accounts or for such other transactions.
An AI-enabled document verification tool can help identify the fake documents by checking the pixel change and font change. Typically, government-issued ID cards come with holograms and if these are missing or tampered with in the documents submitted, can be easily gauged by these ID verification tools. For instance, Shufti Pro’s ID document verification tool can help identify a member’s identity easily using a passport, driving license or identity card by simply uploading a photo of the document from the member’s computer or by taking a photo of the ID and sending it via mobile phone. Pension providers can integrate these third-party ID verification tools with the help of APIs, easilty verify the identity of members, and proceed with their transactions.