The Colleges of Applied Arts and Technology Pension Plan is betting that artificial intelligence and machine learning will play a role in pension administration going forward.
“I won’t pretend that we’re Netflix or Tesla in this, but we are [taking] small steps today so we can take advantage of these advances of technology into the future,” said Mike Dawson, finance director for the CAAT Pension Plan, when speaking at the Canadian Investment Review’s Investment Innovation Conference in November.
On the information technology side, the pension plan is building data infrastructure that will capture, clean and centralize the organization’s data. While Dawson noted the project is in its early days, he said that having the infrastructure in place is a “necessary precondition to taking advantage of the data we have available.”
Dawson himself has also led an effort to capture more data on transactional errors, with the goal of eventually using an AI model to predict errors before they’re processed. Looking at banking transactions, for example, his team is capturing information on the transaction itself such as the date, amount and vendor, as well as related data such as overtime hours banked within his team.
“Whether this will work or not has yet to be seen, but capturing the data will be required for us to have a chance of it working in the first place,” he said, noting that the more data the plan inputs, the better chance it has for business intelligence tools to provide insights it “might not have realized without [that] data.”
Further, the organization is partnering with an AI hub at an Ontario college, which will provide expertise and assistance with using AI to address problems and objectives identified by the pension plan. “Partnering with local universities or colleges is a fantastic way to help expedite some of the efforts that the organization may want to embark on.”
It’s important to have strong support from organizational leadership for innovation and to create a culture of openness at the employee level so they buy in to the new technologies, Dawson said.
The CAAT Pension Plan has also tried to make tools available for employees to tinker with. “I’m a big believer that if you’re trying to innovate or if you’re trying to do something new, you have to do it in a relatively unstructured way. You can start with objectives and you can work toward those objectives, but if you want innovation that’s maybe a bit less directed, you have to make the tools available to people.”
However, employees need to know they don’t have to fear making an error, he added. “If anything were to happen with these innovations, they’re not going to lose their jobs.”
The coronavirus has accelerated innovation at the CAAT Pension Plan, Dawson said, by accelerating the digitalization of some of its workflows. “A lot of the tools we’re able to bring on and use keep a record of all our exchanges digitally. Those workflows will give us data on how people work, [and] will help us connect into the workflows.”