The superannuation sector will see a wave of digital change this year, and funds that aren’t focused on transformation will find themselves falling behind, according to SS&C Australia’s senior director of client relations, Shaun McKenna.
McKenna identified key trends that will underpin superannuation in 2019, the first of which would be a ‘digital to the core’ approach, something that would see funds digitise not only the front office, but their operations and registries as well.
Mckenna also acknowledged with the Royal Commission’s final report comes regulatory uncertainty, and that coupled with the Productivity Commission’s recent report and the Australian Taxation Office’s MIG3 would see significant changes for superannuation funds.
Member outcomes and member engagement are also set to take priority this year, with the growth of companies like MyProsperity and Mint highlighting the increasing opportunities that are made possible by fintech partnerships and the growing importance of aggregating data in delivering the best experience for members.
With the focus turning to cyber-space, the cybersecurity thematic will come into play as well.
“The growing frequency and sophistication of cyber-attacks, the need to regain consumer confidence and the Australian Prudential Regulation Authority’s recent CPS234 standard, will all significantly increase the emphasis on cybersecurity in the next 12 months,” said McKenna.
Putting the trust back into trustee will also be a major theme for superannuation this year, with trustees tasked with repairing the damage caused to the sector by the Royal Commission.
“The need for trustees to be fully informed about their fund’s members, operations and compliance as well as the broader sector are now more important than ever. This will place greater pressure on the fund’s analytic capabilities, performance management and reporting,” he said.
The next 12 months would also see the implementation of the new payments platform, which is the first phase of open banking.
Smarter superannuation funds, McKenna says, would see this automation as a way to drive efficiency and member outcomes, and they would also align their people and technology into “intelligent operations”, while less progressive funds would only use automation for its cost benefits.
“There will also be challenges, of course. The initial rollout of open banking will require funds to be able to deliver data to other providers seamlessly. In the long term, however, when open banking extends beyond banks to superannuation, it could open up exciting new opportunities for funds to leverage their life-long relationships.”