By now we’ve seen that there will be many different providers of Pensions Dashboard Services (PDSs), and that, like you, many organisations will want to offer a dashboard to their customers or members. But what will organisations need to do in order to do that?
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Applying to the FCA to become a QPDS firm
Organisations that want to provide Pensions Dashboard Services will need to apply to the Financial Conduct Authority (FCA) to become a regulated Qualified Pensions Dashboard Services (QPDS) firm.
The application process will be a bit different depending on whether your organisation is already FCA regulated or not. Organisations which are already authorised by FCA must extend, or vary, the scope of their permitted activities. They must complete and submit a detailed PDS Variation of Permission (VoP) application.
On the other hand organisations which are not yet regulated by the FCA must submit a full application form, which provides the FCA with more information about the organisation, it’s internal structure, and the people who run and own it.
The information you need to submit
Those initial differences aside, all organisations will need to provide information that is vital for the FCA to assess whether they meet all the necessary requirements.
First, you’ll need to provide standard organisational information to the FCA, e.g. systems and controls, compliance arrangements, and policy and procedures.
Then, your organisation needs to provide information about your core PDS offering and explain how you will comply with the PDP and DWP standards and the statutory audit, Data export evidence and Consumer Duty considerations.
You also need to think about your PDS business model, the regulatory business plan, outsourcing arrangements, making your dashboard available to third parties and any Post View Services (PVS) you wish to offer.
How long will it take you to complete your application?
We estimate that the work that needs to go into the application will take approximately 6 months. But if PDS won’t be available to the public for another few years, why are we encouraging organisations to start their application process immediately?
Getting FCA approval is only the first step, because only QPDS firms are allowed to connect to the Government’s Central Digital Architecture (CDA) and conduct testing with live data.
This testing will no doubt identify a number of improvements necessary to bring your PDS to the public, so it’s imperative for organisations to connect to the CDA and start testing as soon as possible.
What do you need to ask yourself to begin your application?
The first important question you need to think about is whether you want to do a dashboard by yourself or partner with a Technical Services Provider (TSP), like Moneyhub. We have a separate blog post on that, which lays out the pros and cons of each.
You must also consider the Data Export journey, whether you will offer PVS and if so, how many you will be applying for.
PVS could be important for your customers and are a good way of keeping them engaged, but keep in mind that you will need to apply for each of them. To do that you will need to provide detailed information about every PVS and evidence that you have undergone user testing and how it may have affected the PVS in question.
The more PVS you apply for the longer it will take for you to test them and prepare your application. We recommend that you apply for a very limited number of PVS in your initial application and add more after receiving FCA approval, as live testing will uncover more of what your customers need.
Potential PVS you might consider offering
Compare to a target - Am I on track for my retirement target?
Compare to others - How do my pensions compare to those of people like me?
Explore combining my pensions - Is it the right choice? Who should I combine with?
Investigate missing pensions - Why is a pension not shown that I was expecting to see?
Consider household pensions - Consider my spouse’s/partner’s pension alongside my own
Consumer Duty and Pensions Dashboards
Another important factor will be Consumer Duty.
Since this will be the first new FCA regulated activity in a post-Consumer Duty world, you will need to show how your organisation is acting to deliver good customer outcomes in the development of your dashboard.
We suggest that you gather extensive evidence on good customer outcomes, the key risks identified, how they were mitigated and how your corporate culture helps you treat customers fairly from the beginning of your PDS journey.
Other considerations
You’ll also need to examine whether you want to make your dashboard available to third parties early on. If so, you’ll need to provide the details of arrangements with third parties and the oversight arrangements, which ensure that third parties do not compromise consumer protections and meet all regulatory standards.
And vitally, you’ll need to demonstrate that your dashboard complies with all the relevant PDP, DWP and FCA standards and undergoing a statutory audit, which will be the focus of our next blog posts.
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