As superannuation funds navigate a constantly evolving environment, they will need to be flexible, agile and resilient in both technology and operating models to remain competitive. Funds that are forward-thinking will succeed, while risk-averse funds with insular thinking are likely to fail.
In our new whitepaper, “Future Super: The Need to be Flexible,” we explore five trends in superannuation that rely on or contribute to fund flexibility.
- The desire to differentiate and create value will spark a shift to hybrid operating models;
- The big will get bigger, but the benefit of scale will be slow to emerge;
- Artificial intelligence (AI), automation and data will cement themselves as critical drivers of sustainable growth;
- Innovative technologies will increasingly transform the way funds operate;
- Keeping up with regulatory change will remain superannuation’s number one challenge.
Hybrid operating models need to be designed to meet a fund’s unique needs, and require an outsourcing partner that is not only flexible but also able to work with the fund on the correct engagement model. This must be driven by member experience and flexible operations. Funds can achieve this through high-value engagement points throughout the value chain, which would enable them to transform, simplify, innovate, compete and build stronger member relationships. Flexible operating models also allow funds to operate with greater flexibility, speed and efficiency.
In terms of scale, it’s too early to tell whether scale alone will improve member costs, especially when regulations are driving industry consolidation. This could lead to an increase in compliance costs and the reduction of competition that results from a smaller number of funds. We believe scale must be accompanied by digital transformation and innovation to drive down underlying costs and improve the member experience.
In the coming year, AI and machine learning are likely to become mainstream and will drive the need for quality data and insights. We expect to see business process outsourcing (BPO) operations to increase their use of AI to increase the adoption of exceptions-based, straight-through processing. This will improve speed, accuracy and efficiency while driving down errors and duplications.
For those funds that incorporate these technologies into their operations, the opportunities to improve efficiency, operational excellence, member experience and competitive advantage will be enormous. Those funds that don’t—or can’t—are likely to fall behind.
Progressive funds will use innovative technology to improve their operations and outcomes, including:
- Accelerating collaboration with the fintech community;
- Integrating their systems and partnerships to create member-centric ecosystems;
- Reviewing payments and transaction clearing to improve efficiencies, speed and security;
- Adopting best practice cybersecurity, including DLT solutions to improve the security of digital signatures.
We believe regulatory change will continue to stretch super funds, and also has the potential to dampen innovation. However, funds that have transformed into fast, more configurable systems and operating models will be better able to weather the current regulatory storm.
With super funds facing uncertainty and volatility, these five trends are business-critical issues. For more information on how super funds can be ready to face these challenges, download our "Future Super: The Need to be Flexible" whitepaper.
APAC, Asset Management, Fund Administration, Retirement, Wealth Management