Industry super funds struggle to implement data mining

Retail funds were better poised to take advantage of new technologies to segment data and target member-types, while industry funds may struggle due to a lack of technology, according to J.P. Morgan Worldwide Security Services.

Bryan Gray, J.P. Morgan Worldwide Security Securities head of sales and client relationship management, said industry funds had tended to outsource technology to third-party providers while retail funds already had much of the technology infrastructure.

Super funds could be divided into the haves and the have-nots of technology, although that may not necessarily present a problem, said Gray. Some members would still want more personalised and intimate communications that were typical of many of the smaller funds, he said.

William Fraser, head of J.P. Morgan's e-tech solutions, said industry funds' lack of technology capabilities were a structural impediment to implementing 'individualised' member communications.  

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Industry funds had disparate data sources outside of the fund through third-party technology providers, which posed the question of how to aggregate the different streams of data, he said.

"Because they have traditionally outsourced their technology, it means that they're all of a sudden faced with 'we know we have to build a new capability' - and front-office investment managers are highly technical or need a lot of technical knowledge to help them, or they don't necessarily have the in-house talent which will help them be able to structure these front-offices," Fraser said,

Conversely, retail funds had the technology and in-house capabilities to access and collect member data, he said.