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Applications and Effects of Modern Computing Technologies on Supervision and Management of Retirement Benefits Schemes in Kenya

Study Reveals How Tech Can Transform Kenya's Pension Landscape

The pension sector in Kenya has a huge potential to transform its operations by adopting modern computing technologies, despite currently lagging behind other financial sectors in tech adoption. This is the key finding of a recent study exploring how technology can revolutionize pension regulation, supervision, and management in the country.

The 4th Industrial Revolution, with its rapid technological advancements and digitization, has significantly impacted the financial sector. Fintech innovations like mobile money and lending platforms have boosted financial inclusion. However, this technological transformation hasn't been evenly distributed, with the pension sector often seen as slow to embrace change.

Despite this perception, the potential for technology within the pension sector is immense. Titled: Application and Effects of Modern Computing Technologies on Supervision and Management of Retirement Benefits Schemes in Kenya, 2024, the study highlights several key areas where modern computing technologies can make a difference:

• Investment of Scheme Funds: The emergence of virtual assets (cryptocurrencies) and Robo-advisors (software providing financial advice and portfolio management) offers new avenues for investment strategies.
• Regulatory Technology (RegTech): Technologies supporting Know-Your-Customer (KYC) compliance, machine-readable regulations, Robo-handbooks, and modeling/visualization tools can enhance regulatory processes and understanding.

Given that 83% of Kenyans work in the informal sector and are not members of formal pension schemes, the Retirement Benefits Authority faces a significant challenge in expanding coverage. This study investigated how modern computing technologies can improve pension design and delivery, as well as streamline scheme administration and risk management.

Focusing on stakeholders in Kenya's pension industry, including administrators and trustees of the 1,041 registered pension schemes, scheme members, and the Retirement Benefits Authority, the study employed a systematic cross-sectional survey design. Both quantitative and qualitative research methods were used, including questionnaires, secondary data analysis, and focused group discussions. The findings from this research offer valuable insights into how technology can unlock the full potential of the Kenyan pension sector.

 

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