Leading Financial Regulator meets Business School's Centre for Digital Finance
Financial Conduct Authority Chairman, John Griffith-Jones has visited Southampton Business School's Centre for Digital Finance (CDF) to learn more about its research with the pensions and insurance industry on improving its systems and the connections between companies.
Mr Griffith-Jones says: “Effective regulation needs support from economic theory with intellectual backbone.”
Under current industry practices, when a worker gets a new job, or an employer changes its benefits provider, much costly manual work is required to extract the necessary data and transfer assets between pension companies.
A report in 2012 from the Royal Society of Arts, Manufacturing and Commerce estimated that up to half the value of UK pension assets could be spent on fees, and that workers are unaware of this because the system is not transparent. In addition, the cost of pension provision in continental Europe is substantially lower than UK charges.
CDF Director, Professor McGroarty says: “We appreciated this opportunity to discuss issues around the current pension system. The challenge faced by the pensions and benefits industry in relation to costs is exacerbated by ten years of very low interest rates.” He has been working with CDF colleague, Dr Andrew Urquhart, on a potential research project to develop a benefits platform utilising the Blockchain, which is the transaction technology underlying Bitcoin.
Professor McGroarty is a former fund manager and a founder member of the Interoperability Steering Group, which consists of representatives of government departments, regulators and UK standards authorities.
The CDF team was joined by University Vice-President (Research and Enterprise) Professor Mark Spearing, Head of Southampton Business School, Professor Martin Broad and Gareth Giles from the University’s Public Policy unit.
(pic cap L-R) Gareth Giles, Professor Simon Wolfe, Professor Johnnie Johnson, Professor Frank McGroarty, John Griffith-Jones, Professor Mark Spearing, Professor Martin Broad.