Superannuation funds should adopt a service-oriented, technology-driven business model instead of engaging in price wars to stand out from the crowd, Mercer said.
Mercer financial services business leader in the Pacific market, Andrew Godfrey, said super funds super administration should no longer just be a record-keeping service but noted the industry had underinvested in the area.
“Super administration as a record-keeping service is no longer a sustainable business plan; administrators have to partner with their clients to achieve growth in an increasingly competitive industry,” Godfrey said.
“As new competitors enter the market they have the potential to disrupt the super industry as we know it.”
Godfrey said that while price wars benefited buyers in the short-term, it would diminish profit margins, and said investing in complementary new technology would provide more long-term benefits.
“Integrating the superannuation customer experience — from first point of contact through to financial advice — is achievable, despite long held industry beliefs.”
The comments came as Mercer launched a project, known as the Super Genome Project, in a bid to move away from transaction-focused administration systems, which it called rigid, to market automation, digital transformation, and customer management.
The project aims to reduce paper work and complexity for members, abolish three legacy systems, and launch five customer platforms.
Godfrey said the average Australian spends 535 hours playing computer games each year compared to eight hours engaged with their super.
“However, disengagement shouldn’t be confused with an audience who will not respond to a more personalised and meaningful service, delivered with the right technology and channels, when and where they want it,” he said.
