The super industry is ripe for blockchain adoption

The superannuation industry needs to lean into distributed ledger technology (DLT) as it will deliver significant cost savings to members, according to digital transformation consultancy, Novigi.

Speaking at an international business review webinar, Ash Priest, Novigi managing partner, said there was a growing trend for interoperable and open data sharing between super funds and third parties which could be solved with interoperable DLT solutions.

DLT, also known as blockchain technology, refers to the technological infrastructure allowing unalterable sharing of data while interoperability is the ability for dissimilar blockchain technologies to connect to each other.

He said the trend would also be accelerated by the incoming adoption by super funds of the Consumer Data Right system, following its integration into the banking sector.

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The opt-in system would create a framework of data sharing between super funds, consumers and accredited data recipients.

Priest said interoperable blockchain technology would make automation more efficient in areas such as contribution and benefit payment where large teams of exception managers were currently needed to manually solve problems that could not be solved by existing automation systems.

He said DLT would allow super funds to automate the integration of member data when they choose to reconfigure their beneficiary or insurance models.

Interoperable DLT between administrators and funds would also allow for validation of aspects of a request for proposal (RFP) such as how an administrator would deliver efficient outcomes, Priest said.

Priest said changes to superannuation advice models meant it was a must for superfunds to have interoperable data between third parties like custodians and insurers.

“Advice, especially the more complex forms of advice being externalised, those functions are highly data hungry and member experience is driving the need for data to be shared,” he said.