PFAs rely on IT infrastructure to drive operations
Pension Fund Administrators (PFAs) by virtue of their operations including management and investment of pension funds rely heavily on IT infrastructure for effective performance and quality service delivery. Kayode Akande, executive director, Operations and Services at Premium Pension Limited in this interview with Modestus Anaesoronye share his thought on what it takes to run an effective pension fund administrator company. Excerpts
What does operation of a PFA entail?
Operation of a PFA is a whole in what we call back office activities that integrates with the front office. For example: I come to register you as a potential client and an RSA holder, I give you a form to fill, collect your biometrics including your passport photograph and fingerprint. You fill your name, your next of kin, employer, address, whole lot of information. That form becomes like your agreement with the PFA. That form needs to be processed and needs to be well documented. Operations activities starts with the processing of that form, bringing the data into the database, generating a unique PIN called Pension Identification Number for you and that makes you a bonafide contributor to the Contributory Pension Scheme (CPS).
An operation continues further, because after you have registered, it is not registration for registration sake. Your monthly contribution from you and from your employer will now start coming into the account. Operation process those contribution into your account begin to create value with the funds. We’ve got experts in our Investment Departments that will be investing your money and ensuring that it continues to work for you and continues to grow. Regularly, we will be giving you statements of account, to tell you the balance in your account. The information must include the activities in your account in the course of a month or a quarter. These are what operations entail.
Operations in a PFA company is heavily IT dependent because all these that I have told you are not being done manually, we have got robust information technology platforms and infrastructure that enable us to be able to process these and that is why you will see a PFA like us saying that we have a customer-base of over 600,000.
If 600,000 are contributing on a monthly basis and you are processing it, clearly, you can’t be doing that manually. It means that we must have very powerful and capacious server that will be able to process that. We must have reliable and very large databases and storage systems that will be able to accumulate all those information. We must have effective infrastructure in terms of network for us to be able to connect to our Pension Fund Custodian (PFC). This is because of the intricate nature of funds management in pension administration which requires cooperation of the PFA, PFC and the regulatory body, PenCom.
So, operations in a PFA entails a whole gamut of activities, some of which I have told you and you can see it in investment activities being interlinked with business development activities. This is because when I come to market you, it is more like developing additional business which is interlinked with the IT which becomes an enabler, a support and a driver of business in a PFA. That in summary is what operations in a PFA entails.
You said something about IT and the PFA being highly technologically-driven, what type of applications are involved; are they accessible?
Now there are IT applications and solutions that you probably can pick off the shelf and there are those that will have to be customised. For the type of operations of a PFA of our size, most of our IT solutions are customised for us, starting from the servers that we use. We don’t just go and pick a server off the shelf. The servers that we use are very powerful servers with very intricate architecture and infrastructure. At times some of these are not just built and left on the shelf because they are very expensive. So you actually make orders for them. You agree the configuration with the solutions provider before they are built. You have our Storage Area Network (SAN) that are very powerful. Those ones too, you don’t just get off the shelf to get them. You make your orders and they get them built according to your specification. And then of course you have the Enterprise Pension Administration Software. Again, there are pension software solutions you can actually pick off the shelf, but the one we have actually deployed is called the CPAS, Canadian Pension Administration. Structure of the software is such that it allows a lot of customisation. Two or three organizations can be using CPAS but the applications they are using are actually different to each other .It’s a question of what are the demands of your operations that you want ported onto the application in terms of the specifications that you have given. So that will determine what you have. The bigger you are as a user of IT solutions, the more likelihood that the solutions you are deploying are actually customised solutions not just off the shelf applications.
What are the challenges of maintaining this hardware in terms of security, back-up and other un-foreseen?
In terms of security, when we talk of data movement, hardly would you see us having just one channel of data movement between us and probably our data recovery centre. By the way, every PFA must have what you call a DRC, – Data Recovery Centre and the bigger you are, the more further you go to have a BCPS that is a Business Continuity Plan Site. Some people may mistake the two for the same. But they are actually different. DR site is where you replicate your daily activities, as your transactions are going on here in your live environment, they are being replicated in your DR site, so that should anything happen to your live environment, be it fire or an assault, you could actually go to your DR site and still have your data up till like at least five minutes ago and then be able to continue. That does not mean that we don’t have adequate protection against all these things I have just mentioned. Our data centre is heavily fortified, fireproof and we’ve got powerful sensory, a fire alarm system that would trigger and even activate, if there is a fire for the fire to be quenched automatically. All these facilities are there, but nevertheless, we still have a DRC site. Now a BCP site is set up to contend with more devastating situations. For instance, should anything happen to your environment, take for example what happened in 9/11. Clearly that building is not available for use anymore, even when the usual occupants may still be alive. They could actually move to a different location and continue their business – that is a BCP site. So we also have a BCP site not just a DR site. So, all these go to show that we are very passionate about our customers. We don’t want anything to affect our services to them and the fact that as a PFA, we would be managing data of quite a number of people. I am sure that in a year’s time when you are talking to us, we probably be talking of a customer base in excess of a million and asset under management probably in excess of half a trillion, yes, because now we are talking of about N400 billion in asset under management. That is why we must have allthese buffer in place to be able to cater for any eventuality should anything happen.