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BLOG. 3 min read

Why You May Be Wrong About Digital Transformation

You probably saw digital transformation in the title and thought, “I've seen this and heard this before.” Automation, efficiency, cost-savings, digital, digital engagement, digital-first—you get it, right? Maybe not entirely. Too frequently, the term digital transformation is misused or mislabeled. What’s usually discussed is digital at the margins—gradually integrating new capabilities into legacy platforms and phasing out any dated capabilities.

That's not transformation. That's evolution. That's inching up the scale whereby you're modernizing parts of your capability over time. Although this approach might be beneficial in the short term, before too long, you could find yourself in a perpetual catch-up state because you played it safe and took the middle ground of incremental change. True transformation may require you to start completely anew. It’s an admittedly bold step but it can put you a leap ahead.

Why It Matters

Competition in the superannuation industry is pushing forward the need to transform. With APRA regularly testing, assessing and ranking superannuation fund providers, the details of fund performance and management are more accessible than ever. Performance, however, is no longer the only benchmark available for consideration. Operational efficiency is now measurable—and published. As you know, APRA reports quarterly on fees and expenses, with figures for investment, administration and advice broken out by provider (and at the per member level). As such, the ability to manage—or manage down—expenses now ranks alongside performance as a key deliverable that members may review.

In order for superfunds to continually contain not only ongoing costs of operations and administration but of future technology and member-facing engagement tools, the technology framework they use must change. Enter transformation.

Transform vs. Evolve

In simple terms, a transformative solution for the superannuation industry is about bringing digital to your core. It’s about no longer seeing technology as three distinct “offices”—front, middle and back—but as one ecosystem enabling three interconnected activities.

What does that look like? It’s a straight-through, interoperable, fully automated platform that uses building blocks of “microservices” to configure a bespoke registry solution. Unlike a traditional model where servicing relies on large, monolithic platforms and interwound or bolt-on technology, a microservices approach segments registry servicing functions into small, stand-alone yet connectable components. Each is a cloud-based, API-first module that connects like the pieces of a jigsaw puzzle. Various pieces—including built-in analytics, correspondence and operational and compliance reporting—link to the core registry solution and can be configured into a tailored service model that adapts to specific superfund investments, investors, and reporting needs.

The functionality enables processing and exception management of rollovers, contributions, contribution splits, benefit payments, redemptions and reversals, matching deposits to receipts, and registrations. Lifecycle member servicing and onboarding tools that incorporate intelligence and analytics can help drive engagement and improve the member experience.

The benefits go beyond automation, efficiency, productivity gains and reducing current operating costs. A reimagined platform can also reduce operational and technology costs over time. Speed of change is accelerated. A more interoperable base means easier, and less costly future enhancements and upgrades. And, because it may only be a matter of time until performance rankings include subjective metrics about member engagement, a robust data and analytics capability is increasingly critical. Digital delivers all that and more.

When Business is Technology

Maybe it sounds risky—abandoning your current platform for a totally new model. But this is where industry experience and technology are critical. Neither is sufficient on its own—they must be entwined. Technological innovation must be a standard way of doing business, and today’s leading financial service companies must also be leading technology companies. But technological know-how alone isn’t enough. Industry knowledge ensures the relevant design and application of those systems. And business experience also leads to adaptability when facing unforeseen challenges, responding to new regulations and reporting, or making sense of the ugliness that gets exposed when converting off a legacy platform.

The Time is Now

Time is of the essence. In our industry, the decision process and act of change can be lengthy. It often requires an RFI and/or RFP, in-depth provider review and evaluation, short-listing, more review, and then a board decision. If your strategy is built around adopting digital at the margins with ad-hoc solutions, you may be too late. The industry is changing quickly, and moving now towards real transformation isn't just a challenge to debate. It's a needed action.

With an open, secure platform as the foundation, SS&C will help you leverage the growth technologies needed to drive true digital transformation.  Full Business Process Outsourcing, hybrid, or Software as a Service models help reduce your operating costs and grow your membership base. We actively work with the global retirement industry to develop leading technologies and data-driven business solutions. Our team of professionals combines years of industry expertise with a proven solution set for optimizing actionable data.

To learn more about a transformative digital solution and what it delivers, read our “Digital to the Core” whitepaper.

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