Super fund managers are under increasing pressure to reduce management fees and costs, if they hope to remain competitive. Not only are many more boutique players entering the market, but they now also have an added administrative burden from recent changes to super legislation requiring quarterly payments.
With many systems still being manual, however, precious time is wasted on administrative functions. In addition, manual errors are common, risky and can cost companies dearly.
Automating outdated manual back-office investment administration systems can help managers, both large and small, to remain competitive and to maximise business efficiency opportunities. Automating admin not only makes reporting more efficient, but also frees staff to focus on better servicing customers and growing the business.
Choosing the right technology solutions is as important as taking the automation route. Some of the qualities to look for in a technology partner include:
Local development
The unique nature of the Australian superannuation and tax system means that software and systems developed in other markets cannot be readily applied in Australia. Locally developed products, however, ensure ongoing compliance with local tax and regulatory requirements. They also assure customers of local support and a commitment to undertake research and development, when required, as the development team is located in Australia.
Customer support
It doesn’t matter how good the software is, if it is not adequately supported, problems are bound to arise, sooner rather than later. Customers should have the confidence that they are dealing with a local developer providing local support.
Research and development
The technology partner should be willing to tailor research and development to specific needs, ultimately resulting in enhancements to the software which benefit new customers. Because foreign developers have their research and development operations overseas, development requests from Australian customers are not likely to get priority treatment.
Proven track record
Being able to check references with existing customers is essential, which is also where local suppliers have an advantage. There can be a much bigger risk in going with a US company with, say, 300 American clients, than an Australian one with, say, just 20 local clients.
Quality of staff
Staff should ideally be from the industry, and have a mix of both technology and business expertise so they understand both sides. Having staff from client companies is also a plus as they understand both the vendor and customer perspectives.
Implementation risk
The right technology partner will have the skills and confidence to take a company through a software transition. Many managers today who have already automated their systems are loath to upgrade from proprietary solutions to newer open technology because they believe it is just too hard. But it is possible to do this ‘invisibly’ to the customer.
Cultural fit
It’s important that staff of both the vendor and customer work well together. A true partnership approach will ensure a well-structured and smooth implementation.
Scalable, solid technology
The technology itself must be solid, scalable, modern, open, and innovative so that it can satisfy current needs, but also has the potential to grow with the business.
Seamless integration
The technology must also seamlessly integrate with existing technologies, so enabling companies to maximise current technology investments.
Cost
With so many more boutique players entering the market, the technology should be available to both large and smaller players. A flexible monthly rental option, for example, enables boutique fund managers to enjoy the same technology benefits that were once only accessible to their larger counterparts.
Security
In the current online business environment, the technology must have a high level of security. Both back-office and front-end applications need to boast multi-layers of security, including encryption, password protection and supervisor-only access areas.
Functionality
The technology should support both asset management and unit registry functions within one single system. This means there is less room for error and more efficiency as data only has to be entered once.
— Simon Dominguez is business development director at Garradin.
