If the efficiency of transfer processing in financial services was proportional to the number of industry bodies involved then what a great service customers would be getting right now! STAR is the new kid on the block and is currently getting most of the headlines but, as illustrated above, there are plenty of others. And this excludes all the trade bodies and industry working groups each reviewing various aspects of the transfer challenge.
Thankfully, not all cover the same ground. For instance, some are just for pensions or Cash ISAs. Some deal with the legalities of transferring while others are concerned with service levels or providing automation systems. But there is still a lot of overlap - there are now 5 organisations defining target service levels for transfers. (Although PASA deserves an honourable mention for being the only organisation brave enough to tackle DB transfers!)
In reality, introducing more organisations doesn’t necessarily lead to better results. The real challenge is to get the existing bodies to work together more effectively. An industry working group (commonly referred to as TRIG) undertook a thorough industry consultation on transfers back in 2016 and came up with a series of recommendations. This included a rationalisation of service level definitions (on which STAR is focussed) but the recommendations with the most support related to common processing standards and interoperability between transfer systems: ultimately, if providers use incompatible transfer systems then the customer is always going to get a bad service regardless of what service levels may be defined.
The answer to these challenges already exists in the TeX open transfers framework. The TeX framework covers the widest scope of any transfers initiative but more importantly it has adopted a fundamentally different approach. Rather than a monolithic one-size-fits-all service, TeX separates the legal framework from the technical standards, and leaves the technology to competing system vendors offering compliant solutions. Every participant gets a vote and no-one is forced to use technology they don’t like. With agreement from other organisations, this could provide the answer to joining up all transfer services.
It’s great to have so many good people and organisations trying to improve the transfer process. Efficient transfer processes allow customers to painlessly vote with their feet (or money?) when they see a better offering and thus ensures fair and open competition between financial services providers. But we need to make sure that everyone is pulling in the same direction otherwise we’ll continue to be hamstrung by multiple incompatible solutions that won’t do anyone any favours.