The big data technology aims at analyzing, storing, querying, searching and updating an extensive range of data along with maintaining privacy. This technology exhibits the four vs. i.e. variety, volume, veracity and velocity. Big data technology is applicable in different sectors ranging from healthcare, banking, pension industry and insurance. As per the Bureau of Labor Statistics (BSL), in America 2 out of 5 households depends on their pension as a major source of income. Therefore, the application of big data technology is very important to improvise the future pension industry of the country.
Factors that Led to Retirement Crisis
Ultimately, the major reason for the looming retirement crisis in the US was the shift of defined benefit pension plans to employee-directed defined contribution 401(K)s. Earlier in the 1980s, this move was beneficial as it helped the companies to reduce the retirement obligations and achieve their financial targets every quarter.
However, for employees, it was an unmanageable burden, as they needed to contribute consistently throughout their working career in order to avail the benefits of 401(K) s. Moreover, the employees also faced struggles in choosing the investment options and contribution levels due to high administrative expenses and limited investment strategies. As a result of this, many workers were left insufficient fund for retirement and were unable to maintain their economic position they accomplished while working. These factors have led to the retirement crisis in the USA.
Challenges Faced by the Pension Industry
The pension industry of America faces a wider challenge of impending information than we think. It is difficult to maintain the data, planning service, maintaining the self-invested personal pension and much more. However, big data technology has made it easier as it can easily maintain the necessary logs, assets and records of the pensioners accurately throughout the long-term period. Besides this, the pension industry in the USA also faces security challenges, which is required to be resolved.
As most of the pension companies still work on the traditional methods, it costs the industry more but. The companies also face problem in linking the personal identification details of the pensioners and bank details in a secured manner. These challenges faced by the pension industry in the USA can be dealt with easily with the help of big data technology. Moreover, it also encourages people to invest in pension plan so that they can live their retirement life in a secured and stress-free way.
Pension Industries Future with Big Data
Big data technology deals in various fields and is currently proving to be a boon for the pension sector. One of the applications of big data technology in the pension sector is w.r.t governance. With the help of this, the authorities can now provide services to the pensioners in a cost-effective and evidence-based manner. Moreover, with the help of big data technology, the employees of the pension industry can now get more transparent results and can connect to more pensioners in an easy and hassle-free process.
Another application of data-driven technology is fund design, where the categorization of membership is done based on the work cycle. Also, big-data technology helps to solve the issue of security. All these applications focus on the importance of big-data technology in solving the retirement crisis in the USA.
The big data technology has helped to enhance the productivity in different industries across the world.
Wrapping it up!
However, the unreliable and lack of adequate data sources can become an obstacle while implementing big-data technology in the pension sector. With the proper usage of big-data technology, along with appropriate data the pension industry can flourish in future and can provide far-fetched economic safety to pensioners.
Image credit: Big Data via whiteMocca/Shutterstock