More of Australia’s superannuation funds are turning their minds to the need for technology-led, member-centric systems that leverage open APIs. Digital initiatives are supporting a new approach to digital ecosystems, making it a perfect time to investigate how Australia’s super funds fare in a world where digitisation dominates.
“We think about super and member engagement differently.” Have you heard that before? I hear it often. Without a doubt super funds are increasingly looking at how they serve members and carry out administration. Yes, it might be different, but is it good? And what does ‘good’ look like and how can super funds embrace new opportunities?
To put it into context, consider your experience with a car insurance claim. I remember, in the not-too-distant past, having a minor accident, obtaining two quotes from panel beaters, posting the quotes to the insurance company to get the green light and receiving a letter saying my car will probably be ready in three weeks’ time.
Compare this with today, where I’d use a smartphone to text a photo of the damage to the insurance company. I’d most likely receive a text later that day advising where to take my car, and with repairs happening within a few days.
Not only is the latter more time-efficient, but it also provides the insurance company with data they can use in claim-pattern analysis, helps them to manage risk, and provides them with the opportunity to consider how to change their products to meet member needs.
DIGITAL ECOSYSTEMS GO MAINSTREAM
These digital ecosystems are becoming more mainstream across the financial services sector and now Australia’s super funds are well placed to take their turn at the table. The integration of hardware, software and content in one central platform (or ecosystem), will help super funds rapidly create and distribute new features to their members.
The core benefits delivered by a digital ecosystem can be applied to super funds. A shift in business model structure has the power to disrupt an entire industry and create new opportunities just like Uber and Netflix did.
A digital ecosystem also has the ability to both improve internal business processes while lowering costs. Automation, efficiency and effectiveness are already a focus for the super industry, but there is plenty left to do. Open systems and capabilities present the opportunity to increase levels of straight-through-processing, reduce risk from manual handling, and allow super funds to concentrate on member engagement and deal directly with members rather than having people tied up with traditional administration duties.
DIGITAL-FIRST OPERATING MODEL
As new technology is rapidly introduced and absorbed throughout an entire organisation, technology adoption ramps up from both an internal and external customer perspective – to the point where it becomes a client expectation.
What does this look like for a superannuation fund from our perspective?
- Full access to data without incurring additional costs;
- Secure open integration with other software to further enhance the member experience;
- Access to content and templates so super funds have full control of their front-office and can create, upload and send their own content and messaging across channels at any time;
- Digital-first design operating model that automates the administrative process and allows for both straight-through and exception-based processing – reducing the manual processing risk; and
- Open integrated provides the option to access any financial advice, data analytics and content software.
What could this look like? Imagine a seamless integration between a super fund’s registry, its portal, data analytics, the Australian Taxation Office, insurers, advisers, banks and the latest apps that members use for planning and goal tracking – and that’s it, a digital ecosystem.
So how does this play out in reality? The fact is, this new world needs much more than just automation of transactions – and those super funds still focusing only on this are behind the game.
For the member, access to wider tech means they can set and track goals, get advice, and have that advice integrated into their transactional member portal. Members can also see the benefit the advice has provided and continue to monitor their position.
For the super fund, the ability to see the type of advice members find most useful, and where they are having any issues accessing it, is simply invaluable. Super funds can use the available data to see how a member has interacted with the portal, what advice they received and where they may have dropped out of a particular process.
This full view of a member’s activity can be used to identify exactly what a member’s needs are, perhaps it’s a call from the fund to explain an investment, or face-to-face tailored financial advice.
HARNESSING THE OPPORTUNITY
There is, however, a challenge for super funds. To harness this opportunity with a focus on which technology will deliver the greatest benefits to members, while also delivering solid business and efficiency benefits for the super fund itself.
Not only is technology delivering solutions to these challenges, but we are also seeing the tide turn away from traditional closed-technology solutions.
Super fund trustees and executives are understanding the transformational power of technology and are more engaged than ever in being part of and representing their business goals as part of the transformation.
They also realise that the business and member outcome is the true measure of success and the best outcome may involve various partners and solutions that are integrated to deliver the required outcome.
At Iress, we approach digital ecosystems with a focus on being open. This means providing super funds with more choice and flexibility around the applications they wish to integrate with.
Super funds should be free to research the most appropriate technology, with agile integration, and tailor it to meet their specific business and member needs.
The ecosystem must consider data and enable super funds to connect data silos regardless of whether the data is managed elsewhere.
In the post-Royal Commission landscape – and with the recent and continuing expansion of superannuation reporting obligations – a super fund’s ability to push and pull data across multiple systems has become more important than ever.
The super fund’s data is the property of the super fund and should be readily available in a digital ecosystem, without incurring charges from their third-party provider to access it.
If your super fund is serious about taking charge of both its data and its relationships with members, a tech-first operating model – with an open digital ecosystem – is a vital next step.
Jeff Hall is general manager – superannuation at Iress.
