Super Review asks Andy Hutchings Broso, the managing director of APIR Systems who also sits on IFSA’s Infrastructure Board Committee, his views on industry initiatives to boost electronic commerce.
SR. As someone who has been involved in electronic commerce in the financial services industry for years, what do you believe are the major changes we have seen over the last five?
AHB. I think the major advancement has been that everyone is beginning to see electronic commerce as a business operations issue rather than a technical one. That’s really important because while technologists can see the potential for increased efficiencies and cost savings, the engagement with the change process has to be made within a commercial context.
SR. Are you saying that projects such as SuperEC were too technical?
AHB. In some ways. However, SuperEC did a lot of good work, particularly in defining standards which showed that electronic commerce could be technology neutral and organisations didn’t have to commit to a technology and wind up suffering vendor lock-in. It also showed that if the industry could co-operate where there was no competitive advantage, then significant savings could be made. It helped the industry view cross-border transactions as an integral part of the industry process and less a part of the competitive commercial topography. The banks have been doing this for years, but it was a significant step for this industry.
SR. But we have seen SuperEC and MFundEC fold into the SWIM Council. Doesn’t this indicate some failing?
AHB. SWIM is the next stage in an evolutionary process. SuperEC set the ball rolling. It identified the stakeholders, developed an understanding of the issues and provided the industry with many of the messaging standards.
SR. But take up was slow?
AHB. Yes, that’s true. SuperEC focused on the technical and process issues. To some extent, there was a thought that the arguments for adoption were self evident and the industry would automatically fall into line. It never really came to terms with how change is generated. There was a lot of frustration when it didn’t happen. It tried to gain leverage through software suppliers and many were supportive but that is a long term strategy. Support really only came from those managers with an “efficiency through technology” approach and whose business cycles were also in step with the project.
SR. What impact has this had on APIR?
AHB. Well, as you know, we built the SPIN Register. Unfortunately, unlike the movie A Field of Dreams, we have built a field in Idaho but they haven’t yet come. Still, these registers are critical to electronic commerce and we now have the framework to deploy the registers as the industry needs them.
SR. So, are you saying that SWIM must address the strategic issues?
AHB. I am very excited about SWIM. It represents a great opportunity for the whole industry to take a strategic view of electronic commerce, address the commercial drivers and introduce some of the efficiencies the industry, consumers and politicians are looking for. SuperEC started with the processes and technologies and then tried to get buy-in from senior management, but the case was never made. SWIM gives the industry the opportunity to go back and engage managers across the industry, planners, platforms, fund managers, consultants, administrators, super funds right through to employers. When you do this with the level of representation that IFSA, ASFA and the FPA bring, you can get that buy-in and make progress.
SR. What do you think SWIM can deliver?
AHB. I don’t think it will deliver the $600 million in savings promised by SuperEC, but I think there are savings and improvements to be had for investors. The industry is currently under pressure internally and externally. Every weekend the majors are full of articles attacking the industry and everyone is in the firing line, from planners to managers to trustees. The industry is responsible for national savings and the Government hasn’t underwritten the superannuation Guarantee Contribution, so the angst could be considerable. Politicians will be opportunistic in such an environment. The industry must take the initiative so it was good to see Doug McTaggart (Chair of IFSA) say as much recently.
SR. So SWIM really is part of the solution?
AHB. Definitely. I think the industry understands that now and things will move forward positively.
