R3 To Provide Blockchain Identity Solutions To Help Recover $48B In Unclaimed Pensions
Blockchain technology provider, R3 has revealed that it is working on offering pension companies with the requisite technology to develop fresh identity solutions built on blockchain which could enable savers to recoup part or all of $48 billion worth of lost pension pots in the UK, CoinDesk reports.
The head of R3’s digital identity unit, Abbas Ali, pension services providers are set to debut their solo solutions that will use R3 tech within this year.
According to a study by Profile Pensions, there are about 33 million people who have a pension in the UK. The study also shows that 24% of pension owners cannot trace at least one of their pension plans. As per the study, there are currently about 1.6 million pension pots which have been lost in the UK where averagely each is valued at £23,000. This means that there are about £37 billion or approximately US$48 billion pension which is unclaimed in the UK.
According to R3, the main challenge comes down to identity. Ali explained that the most costly and challenging aspect for pension services providers is user identification. The firm has to verify whether the user remains alive and if they are entitled to these funds every year.
Majority of pension services providers are left with no option other than mailing documents to the holder’s last known address as a way of verification. This leaves lots of loopholes as a verification process.
Ali explained that blockchain will provide the users with an opportunity to have control of the identification process. Rather than having identity profiles for every pension scheme that one has signed up to, users will only have a solitary identity profile that will contain verifiable details such as driving licenses or passports.
Ali also revealed that the new technology is being used by GROW Super, an Aussie pension startup that aids Australians to recoup unclaimed workplace pensions. Blockchain-based virtual identity is gaining traction in the world and its use in the insurance sector will no doubt lead to positive results.