The pension and defined-benefit world didn't particularly want change, especially not the kind of change that Fiona Page was ushering in. She wanted to revolutionize this staid arena where actuaries and trustees had made do with pen and paper for quite some time. She wanted software and servers and algorithms to do some of the work now, because they could do it faster -- much faster.
The pension and defined-benefit world didn't particularly want change, especially not the kind of change that Fiona Page was ushering in. She wanted to revolutionize this staid arena where actuaries and trustees had made do with pen and paper for quite some time. She wanted software and servers and algorithms to do some of the work now, because they could do it faster -- much faster.This is the third of a three-part series on women in small business. This week, we shine the spotlight on Fiona Page, CTO of PensionsFirst.
But Page's message was loud and clear: Resistance is futile. And now even the naysayers are coming around.
Before I spoke with Page, I had no idea what a defined benefit plan was. Now I know it's a pretty risky proposition for the company that's providing it. Basically, that company is telling plan members that they'll get a fixed percentage of their incomes when they retire. The thing is, there's no telling how high an employee's wage will be at the point of retirement. There's also no telling how many years that retiree will live to collect. Ultimately, the pension company has to be smart about managing its money -- and it risk -- so that there's enough in the coffers when a retiree comes calling. What's more, there are plenty of complicating factors-among them, regulatory and accounting changes that make this dynamic field hard to keep tabs on.
So, what was Page proposing? That a diverse team of capital market bankers, expert actuaries, and technologists be put together to flesh out a high-tech solution for risk analysis and fund management.
"We're revolutionizing the way risk and defined benefit schemes are managed. We're changing the marketplace," says Page, founder, partner, and CTO of PensionsFirst, the company she launched in 2007. "This industry was very out of touch with technology. Everything was paper-based and opaque in terms of calculations. And it was incredibly slow. We're providing a web-based technology suite that allows for fast analysis. There's no more waiting for months for a report from the actuary; we can get data in seconds."
After assembling the team, Page worked with its members to develop a web platform, called Pfaroe, and with Dell, which would be her company's hardware provider. "We sat down and talked to our supplier early on. They knew what we needed and helped us put it all together," Page says. "Then we did a lab-based proof-of-concept, and this was critical, because we ended up making fairly significant changes to the infrastructure design as a result. I would tell anybody looking to deploy a technology solution to test it before they deploy it."
Page knew what she needed: a highly secure, scalable, speedy system with ample storage capacity (for terabytes of data) and sufficient space for one or more sophisticated data centers. (PensionsFirst now has two, with about 70 servers.)
The company tripled its ranks in the past year, and today it has about 70 employees in Covent Garden, London. This summer, PensionsFirst is expanding into the United States with the help of State Street, a trust bank. Next, the firm is looking at Canada and the Middle East. "Right now, 60% of defined benefit plans are in the U.S., the U.K., Canada, the Netherlands, and Japan, but the Middle East is an emerging market in this area," Page says. "This is a tremendous opportunity for us to learn from our mistakes and build a great framework there."
Meanwhile, PensionsFirst is raking up accolades for its accomplishments in the pension world. In July, the company won two awards from European Pensions, a trade publication for the European pensions industry. The European Pensions Innovation award is for firms "that have brought innovation to the pensions marketplace, be it through a particular product, service offering or overall business approach." The second award received by PensionsFirst, Pensions Technology Provider of the Year, recognizes "those firms that are leaders in the field of pensions technology, and ultimately rewards who is the best of the best."
And Page has some advice for fellow small-business owners: First, don't be afraid to talk to a big supplier. "Here we were, a small, young entrepreneurial company approaching a behemoth like Dell," Page says. "We were amazed at the focus we got from them." Second, always run a proof of concept before deploying a technology solution. And third, be bold! You just might be surprised at what you can accomplish.
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Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.