Retirement planning deals with massive amounts of data clusters across multiple processes. Keeping participants’ assets safe is one of the major responsibilities of plan providers to ensure customer trust.

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Defined contribution (DC) plans such as the National Pension Scheme in India and 401(k) in the US have become mainstream, but there is no designated registry to track all the retirement plan accounts and their status on one platform. The entire ecosystem is far from simple, with participant data processed across several levels like plan sponsors/employees, record-keepers, asset managers, third-party administrators, insurers, government agencies and more. The sector is still heavily dependent on legacy systems. Establishing an automated system to track funds and rollovers would prove to be a huge problem solver for both users and providers.

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Blockchain is basically a distributed ledger technology that allows data to be stored on multiple servers worldwide. It has emerged as a viable, modern solution to problems in various sectors. Blockchain is proving to be an essential technology for record-keeping and financial transaction services, making it a viable investment in the retirement plan industry.

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The retirement plan ecosystem functions on various levels and the participant data is processed through each stage. Blockchain tech allows retirement plan providers to cater holistic services to their customers in a streamlined fashion. Security and immutability are the two major reasons why Blockchain is ideal for the retirement plan industry. Here’s why Blockchain could help transform the sector:

Keeping plan integrity intact

Many problems in the ecosystem arise due to lack of transparency. Blockchain allows multiple stakeholders to take charge of different processes and there’s no need for a single central authority. This way the power can be distributed, and one party doesn’t have to be in control. Blockchain allows transparency to be built in at the protocol level as data that is once recorded cannot be modified or erased.

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