The digital transformation in the Swiss pension fund landscape

 

"Many pension funds still operate administration systems from the 1990s", explains Martin Osterwalder, Product Manager for Pension Fund solutions at G+D Netcetera. "This software is now reaching its end of life, and at the same time, the old systems can no longer meet the new demands."

The problem goes far beyond technical obsolescence. Pension funds are struggling with structural and regulatory challenges that require coordinated action.

• Data quality and consistency: In evolved system landscapes, information is often fragmented. "You have to look very early on at the data quality in the old system and how we can bring it into the new one", Martin emphasises. Data migration is a major challenge, but also an opportunity to clean things up.
• Regulatory complexity: The Swiss pension industry is heavily regulated. Every system replacement must function flawlessly from both a technical and compliance perspective.
• Cultural change: Implementing modern systems means more than a software upgrade. Employees must transform from administrative clerks to advisory contacts – a transformation that requires new skills.

Modern pension fund solutions enable a fundamental shift in the business model: away from pure administration, towards genuine advisory services and customer focus.

• Dark processing as foundation: Standard processes should be automated and run without manual intervention. "Administration staff should actually spend almost no time in the administration software, but rather in direct advisory conversations with insured members", says Martin.
• Self-service for insured members and employers: Modern portals enable people to initiate processes themselves and access information at any time. The expectation is clear: insured members want to access information digitally and only need direct contact for personal matters.
• Modern API architectures: The optimal interaction between surrounding systems and the administration system is enabled by contemporary interfaces. This flexibility is crucial for future requirements.

When the end of life of existing software approaches, a fundamental question arises: in-house development or standard solution?

"Basically, my recommendation is always to rely on a proven standard solution", says Martin. The reasons: "For many pension funds, developing or maintaining software is not their core business." In-house development ties up significant resources and carries the risk that important requirements are overlooked.

The role of customisation: While the base should be standardised, individual requirements must remain possible. However, it's crucial not to deviate from the standard at every minor detail.

Change management as success factor: Technical implementation is only part of the challenge. "As a pension fund, I must be ready to map my regulations, my statutes, my business model with the software", Martin emphasises. This often requires organisational adjustments as well.

A common assumption is that modern systems automatically lead to lower administration costs. The reality is more nuanced. "In my opinion, they shouldn't really change much", explains Martin. "Only the deployment should accompany the shift away from administration, towards advisory services."

Resource deployment therefore remains largely constant, but the nature of the activity shifts fundamentally. Instead of manual data entry, employees invest their time in personal advisory services. This shift has direct implications for competencies: enjoying customer contact becomes a core skill.

Choosing the solution partner is one of the most important strategic decisions. This involves far more than technical functionality.

Despite all the advantages of modern systems, a replacement remains a complex undertaking. Implementation requires dedicated resources and a team with specialist and organisational competencies is crucial. Realistic planning of timeframes is essential, as projects can take several years depending on complexity. Additionally, professional partners help identify risks early: "When you work with an experienced partner, uncertainties can be removed early on", Martin emphasises.

The transformation of the Swiss pension fund landscape can no longer be postponed. The combination of ageing infrastructure, rising customer expectations and regulatory requirements creates pressure to act that no institution can escape.

At the same time, this upheaval offers an opportunity. Pension funds that invest now in modern, flexible administration solutions are positioning themselves for the coming decades. They can not only work more efficiently, but also provide significantly better service for their insured members.

"Don't remain stuck in the old, but really use the new and think forward", says Martin. This attitude will be crucial for successfully mastering the transformation.

Pension funds that set the right course today will be pioneers tomorrow. The technology is available, experienced partners are ready.

Interested in modern pension fund solutions? G+D Netcetera combines decades of experience in the financial sector with innovative technology. Our P40 platform offers Swiss pension funds a future-proof, cloud-based administration solution that combines security, efficiency and user-friendliness.