Hong Kong’s New eMPF Platform: Risk or Reward?
- By Peter Lammer, Capco
- October 03, 2022
The largest technology transformation initiative since the introduction of the Octopus card back in 1997 is about to happen in Hong Kong. The significance of Hong Kong’s eMPF platform — which will reshape the administrative models of MPF (Mandatory Provident Fund) schemes and standardize, streamline and automate the existing scheme administrative processes — cannot be overstated. Neither can the scale of the task or the potential risks involved in transitioning such vast volumes of critical personal information and data covering the scheme’s 4.5 million members.
The current plan is to complete the transition by 2025. This journey will touch upon many moving parts and face multiple potential challenges as operating models are re-engineered and data rearchitected. Business processes, customer engagement models, and the underpinning data access and management functions will all need to be revisited. Scheme Trustees would be best advised to build an enterprise view of data — which is unfamiliar territory for many — as well as align to common eMPF data standards, conduct a potentially risky data migration cutover, and put in place data delivery contracts and automation strategies. This will be no easy feat!
As Trustees engage with this task, it will be crucial for them to understand what’s ahead of them. The migration and integration to the eMPF platform will change how data is produced and consumed across the entire organization and by the external pool of Trustees. Organizations will need to apply enterprise conceptual modeling from a system and data perspective to current and future eMPF states. Trustees will also need to revisit their enterprise data model to establish the impact of change on their information requirements for core business systems. A well-prepared enterprise data model may prove critical in identifying potential break points when aligning to the eMPF’s common data standard.
Systems will need to be modified to accommodate the new data standard. The second step of data alignment to the common data standard will need to be carried out before the migration and cutover date. For any organization, this kind of data alignment is a massive undertaking and can go horribly wrong if not managed properly. The transformation of customer data also needs to consider regulatory and compliance requirements concerning personal data. To establish the order of magnitude of effort required for eMPF data standard alignment, Trustees should consider profiling their existing data and conducting a comparative analysis to ascertain the variances as early as possible.
A strong word of caution is also needed, as migrating business-critical data is always potentially risky, and migration failures are not uncommon. In most cases, organizations will have underestimated the effort and preparation required to mitigate the potential risks of failure. Data migrations require a comprehensive strategy, a detailed plan, and highly skilled people with an established track record. In addition, organizations will need to invest time in getting to know their data, intimately understanding the target schema, rehearsing the migration multiple times, and conducting an audit and reconciliation after each rehearsal. The rehearsal and audits will highlight the unknowns and help set out ways of dealing with exceptions as they are uncovered – to eliminate surprises when conducting the final cutover.
After completing the initial data migration, Trustees will continue interacting with the centrally hosted customer data, which means interoperability will be critical. Data delivery contracts are one of the most important aspects of designing an efficient hybrid data architecture — but currently, there is no indication of how this aspect will be handled. Trustees should document contracts for all interfaces, including data schemas (message formats and data), transportation types, and their relationship to applications. This reduces the risk of issues arising from versioning and compatibility, while some form of data handshake service can govern the fulfillment of each contract.
One of the critical success factors of any process automation is understanding the information lifecycle that underpins it to ensure that the true benefits can be realized. The transition from manual to automated processing requires consideration not only of the workflow but of the mode in which data is acquired, validated, and transformed to comply with the defined data standards. However efficient the automated process, the old adage of ‘garbage in, garbage out’ continues to be true. As a result, trustees will need to make significant transformational changes to their target operating model (TOM), and workflow automation will become both a vital enabler and a significant business opportunity. Moving to the eMPF platform includes standardizing and automating scheme administrative processes to reduce paperwork and improving data accuracy and transaction processing timeframes.
With the clock ticking on the eMPF timeline transition, all Trustees and MPF administrators should now define their data migration strategy and plans. Top talent with the relevant skillsets will likely quickly become a precious commodity as all 13 Trustees ramp up their in-house expertise. So they will need to move fast to secure the right teams to engineer a successful transition.
Peter Lammer, the managing principal at Capco, wrote this article.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/SIphotography