PHACKS | Pensions Organisations

Pensions organisations have similar KYC and CDD requirements to banks and financial institutions, and additional requirements specific to pensions.

On the customer-facing side, 

• they must carry out the same levels of CDD and EDD, but it is more difficult for pensions companies to monitor behaviours because their customer interaction is much less than it is for a bank.
• as customers age, so their ability to manage their pensions becomes more difficult and a customer may require assistance from a third party, who is often a relative or legal appointee who has power of attorney. Ensuring that that a third party meets KYC and EDD requirements can be difficult and expensive, and often the pension company is unaware (until it is too late) that a third party is under investigation or has a legal action against them.
• monitoring a pension as it begins to pay out, creates another challenge to ensure that the customer is the person receiving the funds correctly and that they are not being diverted or misused by a third party. This potentially includes carers, relatives or persons with powers of attorney.
• knowing when a person is approaching death e.g. in a hospice, or has died, to avoid any possibility of the pension paying out after death, or to ensure that the payment transfers correctly to an approved party, such as a spouse or legally authorised partner.

On the investment side, pension funds require to carry out KYC and KYB on investment vehicles, similar to banks.

Search Terms

An element of the project is the analysis of a range of search terms on the Internet and elsewhere. It is exploring terms for banking and gambling services, but not yet exploring search terms related to pensions. It intends to leverage the results of searches from other sectors for pensions’ purposes. It also intends to explore distinguishing threats and risks associated with pensions fraud and scams including:

• phrases like ‘pension liberation’, ‘loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
• guarantees they can get better returns on pension savings
• help to release cash from a pension before the age of 55, with no mention of the tax bill that can arise

Addressing this situation may be of interest to pensions industry participants in the Pensions track of the PHACKS project.

Realising Value through PHACKS

Today, most of the requirements coming from pensions organisations are similar to those of banks. They involve ways to improve regulatory compliance, AML and KYC, and also to reduce pension, investment and property/real estate fraud. They also recognise significant value in validating specific data from authoritative sources more frequently and in real time, but some of that data is different for reasons of inheritance, taxation, powers of attorney and more. Validating personal data, passport data, address data digitally is possible today in some countries, and additional attributes are slowly being requested.

Preparing for tomorrow, pensions companies recognise the increasing need for more accurate and timely data about their customers (corporates and individuals), and their investments, so that they can better manage increasing risks and tougher business conditions. The approaches that PHACKS to support privacy-preserving data validation in relation to the gradual introduction of government-approved digital wallets for citizens and consumers (natural persons) as well as companies and organisations (including legal persons).

How to Participate in PHACKS

If you are inerested in getting involved, please visit our How to Participate page or Contact Us.