Australia’s superannuation sector is facing mounting pressure to strengthen cyber resilience and fraud protections as coordinated attacks and identity-based scams increasingly target member accounts, according to KPMG’s latest Super Insights report.
The report said confidence in Australia’s $4.5 trillion retirement system now rests not only on investment performance, but also on the ability of funds to safeguard members against evolving cyber threats and operational risks.
KPMG said the sector had experienced “co-ordinated attacks, wide-reaching credential theft, fraudulent withdrawals, and identity-based scams” over the past year, prompting urgent action from regulators and super funds alike.
“We’ve seen co-ordinated attacks and widespread credential theft across the sector, alongside fraudulent withdrawals and identity-based scams, which has driven urgent action by both regulators and super funds to better protect members.”
The report noted that cyber resilience had become a baseline expectation across the industry as funds navigate rising digital engagement, growing member expectations and increasingly sophisticated criminal activity.
At the same time, regulators are intensifying scrutiny on member servicing, operational reliability and governance frameworks, particularly as artificial intelligence becomes more deeply embedded across financial services.
“Regulators are sharpening their enforcement focus on member servicing and in response funds are investing heavily in digital capability to meet member expectations,” the report stated.
“AI continues to be a priority topic for regulators with APRA outlining expectations on AI governance, risk and assurance and ASIC calling for action on cyber resilience in response to the impact that new advances in AI technologies could have on security vulnerabilities.”
KPMG said APRA and ASIC had increased their focus on areas including liquidity risk, valuation governance, trustee accountability and platform oversight, reflecting broader concerns around systemic resilience and governance standards across the sector.
The report also pointed to the impact of the collapses of Shield Master Fund and First Guardian Master Fund, which have sharpened regulatory attention on governance, fraud prevention and member protections.
Alongside security concerns, KPMG said member expectations around service quality and digital engagement are continuing to rise as consumers increasingly compare super funds with banks, retail brands and technology platforms.
Funds are now investing heavily in omnichannel services, AI-driven engagement tools and digital operating models to improve responsiveness and strengthen retention, while also attempting to manage operational complexity and rising compliance obligations.
KPMG said AI had rapidly shifted “from experimental to essential” across the superannuation value chain, with funds using the technology to modernise operations, enhance risk management and personalise member interactions.
Despite those investments, the report warned funds would need to carefully balance innovation with governance and accountability as cyber risks continue evolving.
Looking ahead, KPMG said the sector faced “a mix of opportunity and complexity”, with funds needing to continue strengthening operational resilience while adapting to demographic change, regulatory pressure and accelerating technological disruption.
KPMG superannuation advisory lead Lisa Butler-Beatty said funds that successfully combined scale, digital capability and member protection would be best placed for the next phase of the industry’s evolution.
“As the system grows and mega funds continue to emerge, the winners will be those that can convert scale into consistently better outcomes, which includes not only a strong performance, but also stronger member experiences and robust safeguards.”
