The Pensions Administration Standards Association (Pasa) has published a white paper on digitalisation in the pensions industry, warning that despite recent advancements, reluctance to fully embrace digitalisation persists.

The group acknowledged that there are several reasons schemes are reluctant to digitise, arguing that complex legacy systems, data security concerns and the intrinsic need for trust present "formidable challenges".

The group admitted that digitising pension schemes can be challenging given the various rules and regulations, as it requires creating a secure and robust digital infrastructure to handle complex calculations, ensure data privacy and comply with regulatory requirements.

In addition to this, it highlighted concerns about the security of digital systems in safeguarding the sensitive and personal finance information held by pension schemes from cyber threats and unauthorized access.

However, despite these potential barriers, the working group argued that the potential benefits are "undeniable", with the potential for improved efficiency, accuracy and transparency , supported by the potential of AI and machine learning.

Pasa chair, Kim Gubler, stated: “Digitalisation of pension schemes is hugely important in preparing to provide services in line with those people expect from other industries – now and into the future.

"This transformation is underway and has the potential to revolutionise how schemes operate, providing greater efficiency, accessibility and accuracy.”

Pasa also confirmed that its Digital Administration Working Group will be looking to share further guidance and recommendations on the digitalisation journey and the best way to approach this transformation "in the coming months.

"This paper is our first release in which we set the scene analysing what has come before, where we are now and the possibilities for the future," Pasa Digital Administration Working Group chair, Sian Jones, stated.

"In the relentless pursuit of modernisation, schemes must navigate both challenges and opportunities. Industry leaders, administrators and savers must collectively strive for a future which marries innovation with stability, ensuring schemes remain robust, efficient and poised to provide for generations to come.”

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