Many superannuation funds struggle with poor returns, inefficient operations, inability to scale, excessive fees and an overreliance on revenue from inactive accounts, according to global provider of investment and financial services SS&C.
On top of that, its new whitepaper ‘The Digital way Forward for Superannuation in 2020 and Beyond’ warned that of the ensuing major threats for the Australian superannuation system would be the likelihood of a more challenging economic cycle.
Super funds would also face increasing pressure from the regulator to consolidate and drive scale across the system and in order to stay ahead of the curve become an acquirer rather than a target they would need to look to expanding their digital capabilities, the paper said.
According to SS&C, digital capabilities could be built by pulling levers on three fronts, which included building an underlying operating model, developing a digital member experience as well as incorporating operational excellence into the firm.
The company said there was a range of operating models for provisioning member administration, with a traditional, in-house wholly owned model, the other end of the scale fully outsourced as well as hybrid models and the software as a service model.
“Essentially, technology creates the opportunity to put the super back into your super fund, and re-write your firm’s future (and that of your members). Becoming match-fit from a digital perspective must be a priority for every fund,” the study said.
“In terms of member experience, technology enables firms to design, maintain and evolve the member experience, including greater personalisation, effective use of member data and the flexibility to create new products to meet the rapidly changing needs of the market.”