Scaling up to meet Pension Dashboard demand

This blog has been written by Anthony Rafferty, Managing Director at Origo.

As the fintech tasked with improving the financial services industry’s operating efficiencies, Origo has been involved in Pensions Dashboard developments since 2014. During this time, as well as developing prototypes, we have also been working on delivering a systems architecture that is scalable to meet the anticipated launch and future usage levels by consumers.

The Pensions Dashboard will be both a brand new and free service pertinent to millions of people in the UK, which means there is a high likelihood that it will receive significant volumes of requests when it goes live.

Indeed, our analysis* shows that Pensions Dashboard must be ready to support at least 15 million consumers accessing their pensions data. This figure of 15 million is also closely aligned with discussions that we have held with providers/banks who operate consumer-facing platforms.

Therefore, the infrastructure underpinning the Pensions Dashboard must be built from the outset to support significant volumes of consumers from day one, cope with peaks and troughs in usage, and scale to the target of 15 million consumers.

Not surprisingly, one of the main concerns of those responsible for delivery of this critical project has been the sheer complexity in scaling up the central IT infrastructure to deal with this anticipated volume of consumers. It is vital that this is achieved securely, efficiently and at acceptable cost to Government and industry stakeholders.

So, a vital part of the work we have been doing in developing the find’ service ”“ the process of the Dashboard which, with consumer consent, orchestrates the calls to all pension providers to check if they have a matching policy for the consumer ”“ has been to successfully scale test for that anticipated usage by 15 million active consumers all wanting to find their pensions.

We have benchmarked our solution against example test scenarios and factors, including:
● A 15 million user population;
● 80% of these users active onPensions Dashboard(s) on a given day;
● Invoking an additional find’ request every 30 days;
● 200 pension provider systems (or end points’) in the ecosystem.

As Kenneth May, Chief Architect at Origo, explains this required analysis of the performance and stability of the ‘find’ process at high volume. “Averaged out over a day, this testing requires a throughput of just over 1,000 transactions per second to deal with incoming traffic from the Dashboard(s) and to collate responses from pension providers.

“We have tested at more than double this rate to ensure that we can cope with typical usage patterns which have significant peaks during the working day. Our test results give us confidence that we can reliably achieve, exceed and sustain the required throughput and provide a robust low-latency service.”

Needless to say, we are delighted with the progress we’re making on behalf of consumers, with our recent testing proving that the solution scales.

The offering also provides centralised authorisation services to enable Dashboard access to the pensions which are found and includes advanced features such as Delegated Authority (access) for advisers, guidance bodies and other trusted parties

We have not achieved this alone. It has been done working in collaboration with providers and industry bodies over the years, as well as with the support from our strategic technology partners ”“ MuleSoft and ForgeRock. But now, having successfully tested the plumbing of the Pensions Dashboard, for us the technology is ready for 15 million consumers.

Scotland, Ireland and fintech ”“ the importance of working together

This blog has been written by David Clarke, Policy Director and Founder at Scottish-Irish Finance Initiative.

Fintech is a strategically important industry and can contribute hugely to the development of our native industrial and business environment. Most promising is the development of new companies and most importantly new high value jobs. It is also vital to remember that fintech can be a disrupter and can, and should, create efficiencies that may make some existing roles redundant. With this in mind it’s very important to create the right public policy for the development of the sector.

In order to ensure that the balance of new roles and specialisations works in our favour we need to be certain that we have first mover advantage and scale. The Scottish Government has quite rightly taken a proactive step in encouraging the growth of fintech, most notably with the establishment of Fintech Scotland, to coordinate the activities of the policy makers and the industry to ensure we take maximum advantage at this pivotal growth time for the sector.

But why stop at Scotland’s borders? Those of us that support the Scottish Irish Finance Initiative (our raison d’être couldn’t be more clear ”“ to encourage job and industry growth through cooperation) believe there are huge advantages from sharing expertise and effectively doubling the industry hinterland by encouraging the fintech sectors in both locations to work more closely together.

The combination of expertise, which can be led by both universities and businesses, can of itself helps spawn the development of new technologies and new solutions. We are also strongly of the opinion that by businesses looking further afield (but not that far ”“ a 40 minute flight that’s shorter and easier than any trip down to London!) they can tap potential clients and resources that otherwise would not be available.

Ireland’s existing expertise as one of Europe’s top two fund administration and servicing centres, home to many of the world’s largest banks and financial institutions, offers a wealth of opportunity for Scottish fintech companies. Likewise the significant fund management and administration in Scotland extends the potential for Irish businesses.

And at a time when others are putting up trade borders, we reckon that this kind of cooperation sends out a very positive message to the rest of the world and to the large financial institutions that we need to engage with in order to grow our domestic industries.

Artificial Intelligence and Professional Expertise

Accountancy, law, insurance”¦ these professions usually conjure images of spreadsheets, glass and steel offices, jargon-filled sentences, square eyes and grey suits. Perhaps this is part of the reason why we willingly pay high fees for such services: passing the burden to highly intelligent individuals who will perform those laborious tasks for us. But all this might be about to change.

It’s not about replacement

Machine learning and artificial intelligence solutions are already better at performing many tasks than the professionals: beating human lawyers in reviewing contracts and predicting the outcomes of legal cases[1].

But it is not about replacing lawyers, accountants and insurance managers with machines. Instead, it is about building data solutions that enrich their practice: automating repetitive tasks to free up time for strategic thinking and managing the client relationship; lowering costs to offer services to a wider audience, including legal help for those who most need it; improving detection of insurance fraud to lower premiums for all; accessing and using data to deliver a better more personalised service.

The potential for AI in professional services is clearly considerable: for those who use and depend upon them, and those working in these industries.

The UK in a great position

Furthermore, the UK is in the perfect position to make it happen. With its world-leading centres of AI research, it has been described as first in the world for AI readiness’[2]. It also has a justifiably renowned heritage in providing professional services, with the biggest legal and insurance sectors in Europe, and ranked as the leading exporter of financial and related professional services across the world in 2017.

Those working in the industry must play a central role in the development of these new technologies for them to succeed. They are the knowledge domain experts who are indispensable in designing the machines of the future: framing the challenges, producing data requirements, identifying potential risks and articulating the social and ethical issues.

As Professor Richard Susskind, author of the Future of the Professions says:

“Professionals should become directly involved in the development of the systems that handle and deliver practical expertise.”

A need for increased collaboration

A collaborative approach between professionals, academic researchers and technologists across the professional services industry will ensure that the solutions are best in class from a technical, user and social perspective.

It is such an approach that is being encouraged by the forthcoming £20m Next Generation Services Industrial Strategy Challenge Fund (ISCF). The challenge is set to support the development of data and AI solutions in the sectors of accountancy, legal and insurance services. It will include an initial CR&D call of up to £12m and an initial Research Programme call of up to £3m.

Scotland’s fintechs to play major role in the growth of mission-driven business

Over the past ten years we have witnessed some truly game-changing developments in the world of business. On the back of the worst financial crisis in living memory, distrust of large institutions has grown, consumers have become increasingly empowered, and a new generation of socially-conscious business leaders have emerged.

Rise of the social enterprise

While such economic uncertainty has bred volatility within the more traditional markets, some other markets have flourished and prospered. The rise of the social enterprise has been rapid, fuelled by a demand from everyday consumers to consciously choose or buy from businesses underpinned by strong ethical values.

At Social Investment Scotland (SIS), we have seen social enterprise morph from being a niche movement within local rural communities to a business model of choice for ambitious entrepreneurs in Scotland. And things are already changing again.

Innovation in the social enterprise

Innovative forms of delivering social impact are being delivered via a range of business models beyond the classic forms of social enterprise ”“ this is part led by education but also by investment needs and capital required to achieve impact at scale.

These new mission driven businesses’ (businesses that focus on the achievement of both conventional business aims alongside a clear and definable social mission) require investment that is aligned with these dual business objectives, something that is not yet widely acknowledged by more conventional forms of investment.

A good example is Storii (www.storiicare.com) set up by Scottish entrepreneur Cameron Graham in 2014. Storii seeks to improve the lives of those in care living by providing a platform via which they can engage with photographs and other memories of their past.
The useful and intuitive software has a range of applications across different care settings and has a clear business model alongside a definable social mission.

Through the launch of SIS Ventures, we plan to provide the tools and mission-aligned investment required to help early stage businesses, such as Storiicare, and social enterprises grow and deliver social impact at scale.
Over the next three years, SIS Ventures hopes to set up funds to raise up to £5m of new funding ”“ utilising both Social Investment Tax Relief (SITR) and the Enterprise Investment Scheme (EIS). The plan is to provide debt and equity to entrepreneurs, particularly those early stage ventures that might struggle to access investment from existing sources and have a mission to deliver impact at scale.

What about fintechs?

So where does fintech fit in you may ask? In our view, fintech will play an absolutely pivotal role in the continued development and growth of the mission-driven business sector. Underpinning this belied are two key factors.

Firstly, Impact Investing has expanded in scale in recent years, and one of the key drivers has been the development of new financial technologies. Innovative companies will continue to leverage new technologies to connect social enterprises with investors and raise awareness about sustainable investing opportunities.

Secondly, fintech offers a considerable solution to some of the common financial problems affecting societies across the world, ranging from money transfers and access to insurance and banking, to financial literacy and debt management. We’re already seeing a number of fintech operators emerge within this space, and we’ll continue to see more.

One such example is Sustainably, a fundraising app which enables user to round up their change for charity every time they shop. Another is Gigly ”“ an innovative, free to use platform helping people to navigate the gig economy, by finding them jobs, mortgages, training, services and more.

As one of the UK’s leading fintech hub outside of London, Scotland can play a leading role in marrying its expertise within fintech to its experience and experience in social enterprise. The prospect of developing a mission-driven sector with global scale is one that truly excites us. The launch of SIS Ventures now provides us, and Scotland, with an investment platform to help turn this prospect into reality, by supporting and investing in entrepreneurs who are passionate about making a difference.

For more information about SIS Ventures, visit www.sisventures.com

15 million potential users for Pensions Dashboard

Scotland’s Fintech: A Tale of Two Cities or Two Towers? Part 2

“The old world will burn in the fires of industry. The forests will fall. A new order will rise. We will drive the machine of war with the sword and the spear and the iron fist”

JR Tolkien, The Two Towers, Lord of the Rings

Scotland’s Finance is enjoying a renaissance, a digital economy, should then history dictate tomorrow’s Fintech? In re-imagining Edinburgh versus London, the Two Towers, can Scotland compete as a viable alternative hub on grounds other than simply cost? In this Part 2, of the article, we explore the UK hub economy as it exists, versus regional ecosystems outside of London and the role education has to play? This then is no history lesson..

Old paradigms, new challenges

Our focus for Fintech naturally gravitates towards Edinburgh and its historical ties with London (the City’)? London and Edinburgh make a fine pair, Tolkien’s Minas Morgul and Orthanc, his Two Towers’. Indeed Edinburgh has served its London master well as an affordable outsourcing location and profited from it. In Part 1 we highlighted the operational leverage of outsourcing jobs from London to Edinburgh.

Whilst cheap has always been attractive; lower paid roles can become quickly commoditised. The first indication of the danger was global-sourcing to the likes of India. Here executives were exploring new lower cost locations. Just as our industry was coming to terms with globalisation it got hit by the Great Financial Crisis. The sense of being at the brink’ changed the long term strategies of many boards and many roles have been targeted by Digitalisation sooner. If you hear agile working’ at work then buckle up.

Unsurprisingly decision-makers and executives tend to be a little shy when it comes to their own synthesis. That will come later. The near-term problem is when those attractively valued skills become superfluous to automation. Fewer roles become a negative feedback leading to emigration, fewer graduate roles, resulting in brain drain, making the country less attractive to investment.

The fintech opportunity

Is then Fintech threat or opportunity? It is a question I am sure that my friend Professor Chris Sier asked himself when he became a champion for the Northern PowerHouse’ and establishment of its Fintech hub (Fintech North’). The reality is that over the last 50 years the UK has moved from manufacturing to a service-based economy and with it the North of England lost its economic leverage in the investment and political apparatus within UK Plc.

Meanwhile Scotland (specifically Edinburgh) benefitted from that industry rotation just as the North, Birmingham and other parts of Scotland suffered. Why? Today UK Plc, unlike say Germany, operates a single hub economy that has gravitated wealth and investment around London, the South of England and Edinburgh. London, itself as a global city, a metropolis of both finance, commerce and politics. It enjoys the multiplier effect that stems from such agglomeration, greater GDP per capita and tax receipts, just as other parts of the UK suffer flat or falling GDP, wage disinflation and stagnant productivity.

Technology then can be THE great enabler, a means to rebalance the economic hot spots of the UK. However it is vulnerable to policy error, inward and external investment naturally gravitating towards London, as new Technology companies seek to target Finance firms from Old Street across to Finsbury Square and into the heart of EC2 and Threadneedle. In doing so they set up shop close by.

Dickens or Tolkien?

The sheer gravity of London cannot be underestimated and it leaves the other centres vying for the scraps. How then should Edinburgh and Scotland respond? Coordination. Either Scotland (Edinburgh) seeks to pursue Dickens’ tale of two cities’, competing directly and openly with London, or are we left in a somewhat Tolkien-esque the Two Towers’ scenario, un-separable and subservient? Do we continue to operate as a satellite of the UK capital or increasingly compete for innovation and inward and external investment? This is the key question I pose to Fintech Scotland, under the stewardship of my friend and ex colleague Stephen Ingledew.

After all, Edinburgh (as the de facto main financial centre of Scotland) has effectively defined itself as much by its relationship to the City of London as it has through its own trading status. This link has been further reinforced as US banks set up front office operations in London and back office in Scotland, extending the tendrils between the two. Yet that relationship looks far less secure in a digitalised world for two reasons.

Firstly traditional Finance is in long-run demise and disintermediation, with it relationships between firms are changing from partner to competitor, as the value chain compresses. In the race for operational supremacy, insourcing becomes outsourcing in a capital lite’ world as employees are unceremoniously morphed into the Gig economy. You just need to count full time employees (FTE) v contractor heads in any of today’s big Finance firms to smell the coffee.

Secondly the requirement for affordable moderately skilled administrative staff, as an outsource centre for London, will become less attractive. Workforces in traditional roles will reduce simply as an effect of Digitalisation. We need only examine the realities of the once Scottish Insurance and Banking leviathans; now ostensibly under the control of firms South of the border or overseas. Workforces are rarely preserved on grounds of nostalgia or political intervention. Competitiveness, tax breaks, public-private partnership and or some other economic or political incentives are needed.

London, “the precious”?

The extent of the challenge, to step out from under London’s shadow is illustrated by E&Y’s report Landscaping UK Fintech’ commissioned by UK Trade and Investment, which we might consider a sibling rival to Scottish Enterprise and Scottish Development

International. The report is careful to not overtly state a London bias but is similarly absent of multi-region intentions.

Early on, the report’s imagery is telling; “The size of the market opportunity in the UK is significant due to a large indigenous and technologically sophisticated customer base, and in London’s position as a world leading centre for institutional financial services. The UK also scores highly due to the availability of capital which is sufficient for the sector although there are gaps at the development capital and at the IPO stage. Interviewees commented favourably on supporting factors including the UK’s regulatory approach, financial services infrastructure and London’s position as a global trading hub. Three of our interviewees had relocated their businesses to London due to the attractiveness of the market.”

The shifting political landscape, North-South divide, rise of Labour populism and Brexit paranoia appears to have drawn out a more inclusive tone in the Government’s latest strategy thinking.

“It is also a strategy that recognises and respects the devolution settlements of Scotland, Wales and Northern Ireland. With many of the policies that can drive productivity being devolved, it
is a strategy that necessarily brings our work together with that of the devolved administrations as we work in partnership to get the best possible outcome for every part of the UK.”

IS the One-Britain-One-Fintech a dangerous game to play?

Outwardly it is clear the UK Government is battling hard to maintain its balance (see chart) of foreign inward investment post Brexit. Inwardly it seeks to appease the industry outside of London that it is doing all that it can to build better commute links back into the Capital. This policy is not about evenly spreading investment but enhancing the City’s global standing as a hub, which the Conservatives still laud since the Big Bang’.

The challenge is that a One-Britain-One-Fintech’ message to investors can then leave the regions and Scotland on the periphery for deals. That is why devolved leadership from the Scottish Government was and remains so essential. Of course we should still celebrate London as a successful British export but we should also recognise the danger that we are again concentrating productivity around the capital and in doing so not investing sufficiently in other parts of the country.

London has led the world financial centre classifications for years but is constantly in competition with the US, Europe and Asia. To be anti-UK in a bid to be pro-Scottish is of course self-defeating since London acts as a capital hub. Going into Brexit, undermining London’s importance is folly. This then is our conundrum, a sense of greater good is a proxy for widening regional divide and we risk perpetuating that gap into the fourth industrial revolution. Here again the UK Plc differs to the US east-west coast model and the German 3-Centre economy.

Why Edinburgh shouldn’t be the new London

The challenge then for Scotland is to compete but also to not replicate the single-hub flaw of the UK model. We should invest and promote Fintech across Scotland’s centres not simply hub its focus around Edinburgh. It is very attractive to run your winners but we need to think about the shape of Scotland’s economy in 25 years from now, not just the next 5 years. Fintech like other modern industries should be an opportunity to replace the old primary and secondary industries lost over the last 50 years, the main driver of unemployment, low wage growth, migration and low productivity in the regions.

Our close neighbours at Fintech North’ are well aware of the challenge. As Chris Sier noted: “There is a deep vein of skills, resources and opportunity in the Northern Powerhouse, but for its potential to be realised it is important that we build a strong FinTech community, which means the public and private sectors coming together and enlisting the support of key stakeholders such as our universities.. Over the last year there have been many positive developments in building the FinTech economy in the UK outside of London, including the FCA’s regional sandbox, the impending launch of Nexus at Leeds University and a number of other initiatives. Events like FinTech North help build the regional FinTech community, and supporting them is therefore very important to grow the regional and national FinTech economy.”

It is important then to have a consistent voice in London and overseas. Fintech Scotland, Scottish Financial Enterprise and Scottish Development International (SDI) can provide this, a voice that represents the Scottish Fintech industry as a whole. Outwardly we should seek to partner firms in London while competing where possible for; investment, for students, for intellectual and entrepreneurial capital. After all to create a self-sustaining Fintech ecosystem requires; initial capital + intellectual capital + workforce + start up ventures + ongoing external investment. Just as Chris Sier realised, inwardly we need to encourage competition but also collegiate working across the different Fintech hubs and incubators in Scotland; Edinburgh, Glasgow, Dundee, Aberdeen, Stirling and others.

New paradigms, new opportunities

Whilst history in Finance carries little utility anymore; Scotland can still leverage its rich and long pedigree of learning and quality tertiary centres to bridge the old economy to the new. For example if we look at the current Fintech courses available in Scotland today then we can see they are distributed across the major centres not just Edinburgh. A quick google search of UK Fintech courses lists the new prestigious Oxford and Imperial courses as the top results.

However it was the University of Strathclyde that offered the first Fintech Masters course in the UK, Stirling followed shortly after with its new Masters course ready for the 2018 intake. Meanwhile Edinburgh University, in the now classical Oxbridge model, created Fintech Innovations’ and, in conjunction with the Scottish Government and private sector, to form Fintech Scotland.

The locality is understandable but the focus must extend far beyond auld reekie and just one university. . We should remember that our own Universities are in direct competition for research, overseas students and, within their own walls, competition between faculties for funding exists. We need to short-circuit these frictional fiefdoms. In learning Finance and Fintech will become interchangeable.

The mission of Fintech Scotland is “FinTech Scotland aims to promote sustainable economic growth through innovation, collaboration and inclusion.” It is the last word that is so critical. I was encouraged by Stephen’s first update as CEO, which promises an inclusive approach to embrace collegiate investment and partnerships and meetings both in and outside of Edinburgh.

So step forth Fintech Scotland. My advice to Stephen Ingledew is to be bold when competing with London but to not repeat the mistake of London. After all we are only five million people and geographically and digitally just next door to one another. Put another way we number significantly less than the London metropolis. Our infrastructure links (bar the far North and South) are far more able to support our population than the road-jammed, high-rise, tube squeezed malaise of London.

Let us create a sustainable, multi-centre, ecosystem to share Fintech skills, build synergies, foster accessible learning and opportunities both inside and outside of the University system. In doing so Scotland galvanises itself as a centre of technological advancement on the global stage, to attract students and investors and from that catalyse start-up hubs around those centres. A nice example could be linking Strathclyde University with Stirling University courses, cross-over projects between Finance and Fintech syllabus and tapping into the gaming industry in Dundee.

The idea of exploring Gamification in Fintech would be pretty obvious in California yet not here. Strange. By building creative and collegiate links, between learning centres, Scottish Fintech becomes a vibrant multi-hub success, fully leveraging the talents across Scotland and not localised around one centre. Otherwise we risk Fintech becoming little more than a defensive strategy to protect the current industry rather than something altogether more ambitious and progressive. Recall I posed whether Scotland’s Fintech should resemble Two Towers’ or Two Cities’? What would Dickens think; what indeed would Gandalf the Grey?

The future of Scottish Fintech is neither. It is something new, not something set in the past. Stephen has the most amazing and challenging role ahead of him to achieve that.

JB Beckett, Author of #NewFundOrder 2.0: A Digital Resurrection’. jbbeckett.simpl.com @JonSBeckett #newfundorder