The entire financial services industry and the retirement planning sector are transforming with the adoption of advanced technologies. Technology solutions are being deployed to automate and streamline traditional retirement plan administration services. In the next phase of the transformation, the retirement industry might be embracing Web 3.0 technologies.
Industry practitioners in the financial services sector expect a major disruption driven by Web 3.0 or the Spatial Web. Converging advanced technologies will offer a secure environment powered by data-driven machine cognitive intelligence and an immersive three-dimensional design.
Web 3.0 will revolutionize how we access information on the internet through innovations in decentralized finance (DeFi), Blockchain, and cryptocurrencies. Distributed ledgers will create a more trustworthy data ownership and security system through blockchain technology. Retirement and pension management software will be powered by advanced technologies like artificial intelligence and machine learning to deliver efficiency. The use of virtual and augmented reality could power greater online convergence into the new three-dimensional internet.
While Defined Contribution (DC) plans are gaining popularity, there still is a lack of a designated registry that can offer the details of all the retirement plan accounts. The entire ecosystem can benefit from Web 3.0 as the participant pensioner’s data is accessible across all levels. Advanced technologies will help track funds and rollovers while users and providers can track the status of all investments on one platform.
The key features of web 3.0 will help shift focus toward simplifying retirement savings and simplify retirement plan administration services. These features are:
1. Trustless: The use of Blockchain will provide users complete data ownership and freedom to share it without any risk of exposure by an intermediary. Offering complete transparency in data sharing and better visualization of their finances will help build user trust.
2. Ubiquitous: Web 3.0 will make the internet available to more people and devices. Driven by IoT (Internet of Things), more devices will be able to access the internet and offer real-time visibility. It will aid in retirement planning as users will have clear visibility of their funds. Even advisors, both human and Robo-advisors, can analyze the gathered data in real-time to recommend a hyper-personalized Individual Retirement Account (IRA) and portfolio.
3. Immersive: Extended reality allows users to visualize their finances better. Web 3.0 uses augmented and virtual reality to create a highly engaging environment. By combining these immersive experiential technologies, users can explore various scenarios through simulation, and the visualization of their retirement plan will make the decision-making process more manageable.
4. Permissionless: Smart contracts will help automate retirement planning habits and retirement withdrawals. These self-executing contracts will facilitate the delivery of pension and frictionless movement of funds upon realization of predetermined conditions.
Web 3.0 is currently in its nascent stage. However, it has the power to revolutionize the retirement services industry by delivering greater participant engagement, data accuracy, and transparency. Retirement Plan providers can use the new landscape of the internet to automate processes to improve operational efficiency while building trust with their customers. We at Congruent bring retirement plan administration software powered by the most advanced technologies. Our intelligent pension recordkeeping solution – CORE 2.0, is built keeping futuristic functionality in mind.