The ability of super funds to remain competitive in the market place will depend on their capacity to seamlessly manage the new wave of increasingly complex product and service innovations via an integrated offering. John Burke reports.
In recent years, super funds have been forced to adapt and transform at a rapid pace. An increasingly engaged and tech savvy population with a new set of consumer expectations have driven a more diverse, member-oriented offering. In addition, the Federal Government has pushed through a raft of regulation, including MySuper and SuperStream which has led funds across the board to make significant changes to their processes and IT systems.
The result has been a plethora of increasingly complex product and service innovations that have sought to respond to emerging consumer trends, new technological capabilities and changing regulatory obligations.
This changed landscape presents a new challenge to super funds. Today’s consumers don’t have the time or the inclination to sift their way through a complex, messy mix of products and services – instead they want a smooth, seamless and effortless customer experience. In the broader business world, consumers expect a degree of self management that affords them greater access and control. They are also accustomed to interacting with unified interfaces that combine data, products and services from many sources to create a ‘single point of view’ customer experience. Given that integrated service offerings are readily available in other aspects of their daily life, it is not surprising that consumers expect similar standards of service from their super fund.
As a result, funds must ensure their administration function reaches beyond traditional record keeping and transaction processing to include the seamless aggregation and management of products and services from many underlying providers.
The pursuit of an integrated service offering raises key considerations for funds and administrators across a number of domains including, but not limited to, technology, member services, governance and compliance.
Manage key stakeholders
Effective stakeholder management is critical to successfully integrating services. Although this may seem self-evident, it is an area frequently mishandled for various reasons including oversight, haste and a reluctance to share information with external parties.
The stakeholder management process should begin with clearly identifying the key stakeholders, including the funds themselves, administrators, software providers and other third party specialists. Funds and administrators must then consult with, seek counsel from and satisfy the needs of each stakeholder to ensure the smooth aggregation of products and services.
Central to the stakeholder management process is transparency and communication. There needs to be clear and open dialogue between all parties about roles and responsibilities, and how joint efforts are combined to produce desired outcomes. Imagine an orchestral performance where all the musicians are playing perfectly, with the exception of one who is playing off-key. Invariably, the performance will frustrate the other orchestra members and disappoint the audience. The implementation of an aggregated service by a super fund is much the same. If communication is unclear and goals and processes are not transparent, then the end result will be a disappointed, dissatisfied member who may well take their business elsewhere.
Stakeholder management also requires a considerable degree of governance. For example, to implement a member directed investments option there are many stakeholder groups, both internal and external, to consider. Each must operate synchronously and collaboratively, which is a complex, time intensive and costly undertaking. If you add in functionality for additional services such as annuities, enhanced financial planning capability or banking integration, the complexity and risks are compounded. Careful management is required to ensure each of the various players effectively fulfils their obligations.
Preserve the member experience
The aggregation of products and services within an integrated offering involves a delicate balancing act. In the quest to deliver a comprehensive range of products and services, funds run the risk of inadvertently diluting the member experience. Too many choices can be overly complex and confusing. Too few and members may take their business elsewhere. When integrating services, funds must ensure members can continue to quickly and easily access information and perform interactions that meet their needs. The member experience must remain contemporary, simple, intuitive and responsive.
Enhance client engagement
Funds must keep pace with constantly evolving member expectations to remain relevant in the marketplace. This will involve greater client engagement to ensure funds effectively tap into and respond to changing member demands. When the choices seem boundless, intimate understanding of member needs and behaviours will help funds decide which products and services are most important and should be included in the integrated offering.
Focus on data security and compliance
Risk and governance are vital considerations when integrating services. When funds form a relationship with a third party supplier, invariably customer data is exchanged between the two. This raises issues with respect to data security and privacy, areas heavily regulated to protect the rights of consumers. How can funds ensure appropriate governance and compliance with their legislative obligations when their member information enters an external environment? Who owns the liability in the event of a data security or privacy breach? Due to the high stakes, these issues need to be carefully managed and monitored by funds and administrators. Compliance teams must be closely involved in the implementation of integrated services to ensure a fund’s legal obligations are met, member interests are protected and all important member confidence, trust and loyalty are preserved.
Quality of life outcomes
Funds should not lose sight of the tangible benefits an effective integrated service offering can deliver to their member base. The new, improved capabilities made available – such as calculators and other tools – can assist fund members to make more informed decisions, which in the long term can considerably improve their retirement outcomes. This goes to the very heart of superannuation by significantly improving a member’s quality of life when they retire.
The delivery of integrated services is a dynamic, not a static process. Going forward, member expectations, technological capabilities and regulatory obligations will continue to evolve, necessitating further innovations to super products and services.
In the not too distant future, members’ base level expectations of their fund will be much more sophisticated. Standard features of modern, responsive funds will include predictive analytics, calculators that lead to actions, member directed investments and a unified interface for online banking, superannuation and more. Value-add services such as links to discounted health insurance and a wide variety of other products and services will become the norm.
Savvy funds are recognising that integrated services will soon be part and parcel of what super funds do. Investing time, energy and resources into establishing and maintaining effective relationships with third party providers today – and becoming good at this process – will position funds to reap rewards well into the future.
Next generation technology
Modern, open and scalable technology is pivotal to a fund’s ability to seamlessly integrate product and service innovations. More advanced functional and administrative capabilities enable customer centricity, channel and system data sharing, real-time interactions and the ability to quickly and easily configure new product and service offerings and bring them to market.
Next generation technology serves as the glue that binds the provision of integrated services – it allows funds to meet changing customer expectations and regulatory obligations and creates a unified, enjoyable and satisfying member experience that sets the stage for super funds to protect and grow their market share.