Merger and regulatory pressures are slowing the rate of technological innovation in superannuation funds, according to SS&C Technologies.
Speaking at an international business review webinar, Jeff Arnold, director of sales and marketing at SS&C Technologies, said super funds were reluctant to be the first to innovate their operations because of the perceived costs of moving or transitioning to new technology providers and solutions.
“The c-suite, the board, the people within the organisation, they are busy, busy people, trying to combat all of these different pressures so having the time to really look at a new platform or a new provider is a big challenge,” said Arnold.
He also said super funds were naturally risk-averse and slower to digitally transform because they were in the business of protecting people’s money.
“So sometimes it takes brave leadership to really understand how some of these smart technologies are able to support their businesses in a way which allows them to leapfrog their competition and really differentiate themselves,” he said.
While there has been a historical lack of innovation, the merger trend was beginning to highlight cracks in the operational processes of super funds, Arnold said.
“As these funds merge, and become much bigger, the problems that they've seen historically double and treble so they're really having to look at new ways of operating and looking at hybrid models,” Arnold said.
Arnold described the hybrid model as outsourcing lower-value transaction points such as administration while insourcing higher-value operational components.