Few in the industry will not benefit from Skandia's decision to become a
full Origo sponsor, putting its money where its mouth is when it comes to
supporting e-commerce in the IFA community.
Probably the only losers will be the small group of life offices which
continue to fail to contribute their fair share of the costs of Origo's
work in developing and maintaining the standards necessary to maximise
industry savings via e-commerce.
Origo sponsorship, I feel, can be taken as a clear indicator of any life
office's intention to support the IFA community or otherwise. Although the
number of sponsors has fallen over the last few years, this has been as a
result of consolidation within the market as life offices merge or take
each other over.
The only exception to this was Britannia Life, where its withdrawal as an
Origo sponsor in fact gave an early indication of its exit from the IFA
sector less than a year later.
In the last few months, Origo has been approached by players in both the
managed funds and mortgage industry. These players have recognised the
benefits that have been achieved in the life and pensions sector by the
existence of standards that will enable product providers to support a wide
range of technology service providers in a streamlined fashion.
The benefits of common data standards can be easily seen from the way in
which life offices are now able to support multiple emerging information
portals for IFAs, such as the new services from Misys, AssureWeb and
Synaptic Systems. Even with standards in place, a number of insurers are
finding it a challenge to allocate the necessary resources to support the
parallel development of each of these services.
By comparison, one of the most common complaints that I hear from lenders
is that, with the number of mortgage service providers, infomediaries and
electronic brokers wanting to deal with them on-line, the lack of any
common standards means that each individual business partnership requires
specific systems development.
I have long believed it is essential that a single set of standards should
be developed to meet the needs of all organisations that distribute
financial products through IFAs. Failure to do this will, at best, lead to
a situation where IFAs and consumers are faced with increased costs because
it is not easy to exchange data between different systems on the adviser's
In a worst-case scenario, multiple standards will force advisers to re-key
information they have already entered into other systems. In practice, many
will choose not to use the e-commerce tools offered and stick with
paper-based systems – clearly a retrograde step.
Against this background, it is hardly surprising that several of the
biggest lenders are now supporting Origo fulfilling a standards' role in
However, some organisations have questioned if a body sponsored by members
of the life insurance industry can really act as an impartial provider of
standards for a wider marketplace. Such comments, however, ignore two key
First, IFAs act as distributors across a wide range of product providers.
This means it is only by using systems which operate to common data
standards that they can take best advantage of e-commerce in automating
their systems and enhance the services they offer their clients.
Even if product providers do not want to help IFAs to improve client
service, they should recognise that the days when life offices provided
life insurance and pensions, fund managers opera- ted unit trust and
similar investments and building societies provided mortgages are well and
The modern financial service company is an integrated organisation
offering a wide range of products. The two biggest mortgage lenders,
Halifax and Abbey National, each own Origo sponsors, Clerical Medical and
Scottish Mutual respectively, M&G is now part of Prudential and Standard
Life has become a serious force in the mortgage industry.
The value of what has been created for the UK life and pension market
should not be understated.
Only a couple of years ago, US organisations were looking to enter the UK
market on the basis that they had a more suitable set of operating
The US is always held up as being ahead of the rest of the world in the
development of e-commerce but in this area it is not.
I am aware of several US life offices and technology providers expressing
a keen interest in the work which is going on at Origo.
No other initiative in the world has established a similar set of
functional XML standards for the trading of life and pensions over the
The current standards are now to be extended within just a couple of
months to include both the mortgage and managed funds industry. These
should all be delivered by the end of spring.
The existence of such a suite of fully functional data standards presents
a massive opportunity for UK Financial Services plc to become a major
exporter of electronic financial services.
The UK already has a clear lead in e-commerce relative to our European
Union partners. The tools are now being put in place that can make the UK
the most effective place to base European personal finance e-commerce – an
opportunity that should be grasped with both hands.
The existing sponsors are making it clear that the door is open for
additional sponsors, such as Skandia, which is far from a typical life
office, to join. By allowing Origo to become involved with areas outside
their traditional areas of coverage, the existing sponsors are putting the
overall needs of UK Financial Services plc in advance of their own and
showing true leadership. It is to their credit that this is being done
without up front conditions over the long-term funding of the organisation.
The existing sponsors have taken a bold and constructive approach in
admitting more sponsors and allowing the development of standards to
support a wider range of business areas. The onus must now be upon
non-sponsors, including fund management groups and mortgage lenders, to
take advantage of the opportunity to join as full sponsors.