Superannuation funds will need to be flexible, agile, and resilient in both technology and operating models if they want to remain competitive, according to a whitepaper.
SS&C’s whitepaper ‘Future Super: the need to be flexible’ said funds that were forward-thinking, flexible and agile would succeed, while risk-averse funds with insular thinking, were likely to fail.
The paper said there were five trends in super that relied or contributed to fund flexibility.
These were:
Hybrid operating models, the paper said, needed to be designed to meet an individual fund’s unique needs and required an outsourcing partner that could be flexible and worked with the funds on the correct engagement model.
It said this would be driven by member experience and flexible operations. Funds could achieve this through high-value engagement points through the value chain, which would enable to transform, simplify, innovate, compete, and build stronger member relationships. Flexible operating models would also allow funds to operate with greater flexibility, speed, and efficiency.
On scale, the paper said: “While it’s too early to tell, reality may be that scale alone won’t improve member costs, especially when it is regulatory-driven. Instead, this could lead to an increase in compliance costs and the reduction of competition that results from a smaller field of funds.
“We believe scale must be accompanied by digital transformation and innovation to drive down underlying costs and simultaneously improve the member experience.”
AI and machine learning would make the transition to becoming mainstream in the coming year and would drive the need for quality data and insights.
“We also expect to see business process outsourcing (BPOs) use AI to increase the adoption of exceptions-based, straight-through processing. This will improve speed, accuracy and efficiency while driving down errors and duplications,” the paper said.
“For those that operationalise these technologies, the opportunities to improve efficiency, operational excellence, member experience and competitive advantage will be enormous. Those that don’t (or can’t) will fall behind.”
The paper noted that on top of AI, super funds would:
The paper said funds that had transformed into fast, more configurable systems and operating models would be able to weather the current regulatory storm.
“As super funds navigate through a constantly evolving environment, and even as they face a once in a lifetime event with COVID-19, these five trends are rapidly becoming business-critical issues,” it said.
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