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They're all trying to improve the end-user experience,
across the board, " says George Sepsakos, a principal in Groom
Law Group, Chartered, in Washington, and a columnist for
PLANSPONSOR magazine. " We have all become accustomed to
technology in our lives, and they're trying to catch up and make
the retirement side of someone's life feel similar to what they're
seeing in other parts of their life. "
In general, recordkeepers are evaluating all potential tech
upgrades in terms of their contributions to the particular provider's
scale and efficiency, says Nathan Voris, head of channel
strategy at Morningstar in Richfield, Ohio.
" The recordkeeping industry is still facing fee compression,
and a lot of disruption, " says Tim Hoying, a managing director
at consulting firm Accenture in Wilmette, Illinois. " Even the
largest, most efficient recordkeepers need to continue to push
the frontier of what efficiency is, and the only way to do that is
through technology. "
Leaning Into Automation
From an operational perspective, that means looking to automate
as much as possible and for ways to do tasks more consistently
across the recordkeeper's client base. In terms of the
product, a major area of focus for recordkeepers has been on
generating the data that plan sponsors can use to make better
decisions about their plans, says Amy Reynolds, a partner in
consultant Mercer, in Richmond, Virginia.
" There have been many enhancements in plan sponsor
reporting and making the most of the web tools for that, " she
says. " Sponsors are looking to create methodologies that really
leverage the data recordkeepers have, as opposed to just using
standard reports that have basic information. "
A goal of recordkeepers is to help their plan sponsor clients
understand demographic changes over time, figure out how
to assist different segments within their participant base and
become aware of areas where they can improve engagement.
But the accelerated pace of digital transformation presents
a bevy of challenges for recordkeepers. Many still work
from legacy, mainframe systems that have been bolting on
new services or products. That patchwork approach can make
it harder to pivot quickly, when necessary, and poses additional
hurdles for partners.
Bridging the Tech Divide
" For recordkeepers with more legacy tech stacks, there might be
challenges in adding more functionality on top of it, " Sepsakos
says. " So you're seeing them look toward whether it makes sense
to try to continue to build on their existing tech or to completely
move to a new program. "
Voris says the rise of application programming interface,
or API, solutions has highlighted the gulf between recordkeeping
firms with the most tech-forward systems and those
that have lagged in digital transformation.
" Ten years ago, an integration might have been a multiyear,
deep data integration, but, with the use of APIs, these things
can now be done much more quickly, " he says. " There might be
a third-party solution where a 7-year-old company has full API
capability, but lining that up with a recordkeeper that might not
be all the way there can be difficult. "
Such issues mean that some recordkeepers simply may not
be able to advance their technology as quickly as they would like.
" People want their platform to be better and to do all the cool
things now, " says Martha King, Infosys' chief client officer, executive
vice president and head of its Retirement Services Center of
Excellence in Malvern, Pennsylvania. " But often it's going to be
a multiyear journey. That's the sobering part of the conversation
we have with some recordkeepers. "
The Challenge of AI
Looking ahead, experts say the consolidation that has existed
within the industry for much of the past two decades will likely
continue, as some firms see mergers and acquisitions as their
most efficient means of achieving the scale necessary to remain
competitive. The industry will also likely see further integration
of newer technologies such as generative artificial intelligence.
" There are all kinds of challenges concerning how [AI]
is used-everything from the ethics to the accuracy, " Hoying
says. " You can envision it having a huge impact on the business,
but I don't think anyone has figured out all those angles
or dimensions yet. " -Beth Braverman
Methodology
The 2023 PLANSPONSOR Recordkeeping Survey was conducted
in June via an online questionnaire. Thirty-nine recordkeepers
of defined contribution plans participated, providing information
as of December 31, 2022. Interpreting our overall findings
through analysis in the 2023 Investment Company Fact Book, we
estimated that these 39 providers account for 97% of the overall
DC market. Providers of each plan type reported their overall
plan assets and number of client plans and participants.
In the recordkeeper rankings section (see the provider
profiles online), listed are the top 10 largest recordkeepers
in multiple categories, according to measurements such as
overall assets, number of participants, assets per participant,
etc. Profiles feature details such as overall assets by plan type
and participants by plan size; they additionally note the availability
of offerings including student loan repayment, managed
accounts, financial wellness options and more.
To participate in the 2024 PLANSPONSOR Recordkeeping
Survey, please email surveys@issmediasolutions.com.
-Kimberley Gonzalez-Quiles
PLANSPONSOR.COM July - August 2023 33
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