APG will develop a new system for the policy and capital administration in collaboration with the Danish company Festina Finance. Francine van Dierendonck, member of the Board of Directors of APG, explains the reasons for choosing the relatively small FinTech company and what her expectations are in relation to the collaboration.
The system to be developed is necessary because of the transition to the new pension system. Instead of a so-called Defined Benefit system with fixed payments, the Netherlands will be switching to a collective Defined Contribution system. This means the pension amount depends on the contributions paid and the investment returns realized. “We decided to invest in a new system, as this means a huge step forward in terms of technology, speed and flexibility", says Van Dierendonck.
Festina Finance does not belong to the major IT system houses, but is a small, specialized FinTech company. Is that choice not representing a risk?
“Every scenario involves risks, even if we would have developed the new system in-house. The existing risks are under control. We have seen Festina Finance execute an extremely successful implementation at PensionDanmark (large Danish pension fund, ed.). The Danish pension system is already further on its path towards a Defined Contribution system than the Netherlands, so PensionDanmark is a good example. Based on the proof of concept and the collaboration with Festina Finance in the past six months, we are convinced the company, together with us, is able to implement their system in a superior way. Moreover, we will also integrate the software delivered by Festina Finance in-house. The new system is developed under the supervision of their experts, but we will eventually do it ourselves. This means we are not infinitely depending on Festina Finance and a lot will still be in our own hands.”
Can a small party, such as Festina Finance, stand up to a large player like APG should the Danish company deem this necessary?
“Absolutely, but the good news is that the majority of the software components we need have already been built for the implementation at PensionDanmark. I have attended a session myself during which specialists of APG and Festina Finance collaborated enthusiastically at the interface of the pension scheme and IT. And I have not witnessed anyone sitting silently in a corner.
Is that also an example of the cultural fit between both organizations, what was one of the reasons to choose Festina Finance?
“Sure, I believe the employees of both organizations get along really well and we may conclude that the Danish and Dutch culture are really not that different. Another thing is that the pension systems of both countries belong to the absolute best.”