Mexico issues new guidelines for Afores

Mexico's retirement system and pension watchdog Consar published a raft of modifications to regulations integrating innovative technology, including regtech, and others to improve services at pension fund managers known as Afores.

The tech modifications represent the sixth and final such update made during the administration of President Enrique Peña Nieto, whose six-year term ends December 1 with the swearing in of president-elect Andrés Manuel López Obrador.

The changes focus on promoting technological innovation at Afores through regtech in particular, as well as strengthening security against cyberattacks, diversifying the biometric authentication systems used to confirm contributors' identities, and reducing Afore operating costs by facilitating procedures and improve processes.

The guidelines to improve service at Afores are the result of a 24-month project to review shortfalls and analyze client complaints, made in collaboration with E&Y.

A basic rundown of both sets of changes is provided below; however, the full memorandum is available here (in Spanish), and the Consar memorandum to improve services can be accessed here (also in Spanish).

Tech updates

1. Cybersecurity: IT Security schemes are strengthened to increase the protection of workers' data and retirement system (SAR) operations against possible cyberattacks.

Afores are now required to:

a) Conduct frequent tests to its business continuity and contingency plans, as well as carry out comprehensive tests of its substantive processes against IT security attacks;

b) Perform periodic assessments of technological risks and vulnerabilities;

c) Conduct periodic audits with third-party specialists in the field of cybersecurity;

d) Have specialized personnel and strengthen their internal areas of IT security;

e) Establish professional groups specialized in cybersecurity.

2. Consar set guidelines for the adoption of new technologies and innovative models, and RegTech in particular, by the Afores and third parties, calling for:

a) Innovative models to promote voluntary savings, the registration of workers, the expansion of service coverage and operational improvements to the SAR;

b) New services mobile apps designed for contributors;

c) Participation of third parties, such as technology companies (fintechs), in initiatives that improve processes, stimulate pension savings or other aspects of financial inclusion through technological innovations, pilot programs (sandbox) and studies.

3. New biometric authentication modalities (e.g. voice, contact-less, facial, etc.) are allowed to facilitate authentication and remote procedures for workers.

4. Other improvements. The procedures for recertification are adjusted. Afores now face stronger obligations to contact workers aged 57 and over. Criteria for the administration of youth accounts are established.

Improving Services

In August, Consar announced that it had gathered data, with the help of E&Y, on problems occurring throughout the Afore system. The new rules, originally scheduled for release in the third quarter, reflect the policy changes emerging from that research.

As detailed by Consar, Afores now must conform to the following guidelines:

1. Obligation to have a centralized registry for the control of service requests. Afores are required to adopt an auditable system for centralizing all service requests. This will improve the traceability of the service requests that they receive.

2. Definition of complaint and concepts related to the service. The concepts and terminology used to distinguish "complaints" and other service concepts is made uniform throughout the system in order to have a reliable registry that can be audited by Consar.

3. Clear and transparent client service processes. The Afores must provide contributors clear and well-defined instructions in a policy manual that explain the processes that ensure the reception, attention and response to inquiries and procedures presented by workers and their beneficiaries.

4. Attention to complaints. The administrators must generate and implement the mechanisms and processes that allow them to guarantee the attention of the complaints they receive, as well as to give an initial response to them within a period of no more than five business days.

5. Requirements for Afore agents aimed at benefiting workers. The rules outline the information service agents are required to explain to workers, as well as establishing guidelines on accreditation, training and testing of service agents.

6. Delivery of a "bill of rights" for users. Afores must deliver a letter containing the rights of their clients in the attention and follow-up of consultations, procedures and complaints, as well as the levels of service that they are committed to comply with.

7. Preparation of an annual nationwide customer service coverage program. Based on an analysis of the demand for their services and the infrastructure they have, Afores must prepare an annual coverage program that clarifies that it has the human and material resources necessary to meet the service levels that it defines. This will be auditable.

8. The obligation to measure branch wait times and customer attention. For the adequate monitoring of their service levels, Afores must establish mechanisms for measuring wait times and evaluating attention provided.

9. Procedures for following up on user requests. The Afores must implement mechanisms that guarantee the follow-up on requests presented by the users, including notification of their conclusion or status through the means of contact that the worker has provided.

10. Criteria are established for care appointments offered by the Afores to workers. Appointments must be scheduled and attended within an established timeframe.

11. The obligation to provide updated and uniform information is established. The Afores must make available to users uniform and updated information in all its service channels: face-to-face, non-face-to-face and mixed.

12. Annual evaluation of user satisfaction. Consar will conduct an annual survey in order to gather the opinion of users regarding the service provided by Afores. Consar will make the survey results public online.