With key MySuper implementation dates creeping closer, conversations with our customers have provided interesting insights into how the industry will respond to MySuper and the shape of future product strategy. Decisions regarding product design will not only determine ease of implementation now, but will provide flexibility for future innovation and the ability to win or retain market share.
Product design approaches we have identified can be broadly classified into:
- Rebadging existing default schemes
- Launching a new scheme
- Launching a new division, product or category into the existing scheme
- Combining MySuper and Choice in the same member account and treating MySuper as an investment option within the account – either within a new or existing scheme
For some superannuation funds, MySuper is simply viewed as a ‘re-badging’ of the existing default scheme. For these funds, it will drive some simplification of historical issues, and of course deliver the obligatory objectives of simpler fees, insurance and investment strategies the legislation intends. Other institutions are leveraging the MySuper opportunity to drive a wider review of product strategy, as well as considering how MySuper aligns with future aspirations. ‘Lifestyle’ investment options are being considered by many as a core MySuper product feature.
Launching a new superannuation scheme requires the normal legal and compliance tasks, in addition to consideration of how to aggregate data for customer statements and websites. There is an opportunity to improve the member experience by presenting customers with a ‘whole of portfolio’ view where they have other business with you – choice, defined benefit or investment accounts, as well as other assets – ETFs (Exchange Traded Funds), direct shares or term deposits. This combined account option positions product providers well for the future introduction of value-added services and features on the Choice side, without the need to open a new account.
Establishing a new division, category or product within a superannuation scheme overcomes the problems with multiple schemes, however consideration must be given to the impact on the segregation of data for industry and regulatory reporting, changes to operational processes and ease of implementation on existing technology.
‘Member centric’ technology systems pose some constraints when compared with ‘customer centric’ systems. In a ‘member centric’ system the customer details and account records are combined which makes it difficult for the member to exist multiple times in the same scheme. ‘Customer centric’ systems allow for a single customer record that can hold multiple superannuation accounts.
Defining MySuper as an investment option within a customer account which also allows Choice contributions creates a simplified member experience, and makes it easy for members to switch between MySuper and Choice, and back again. A simplified and flexible member experience works towards that holiest of superannuation grails – member engagement.
This concept of using MySuper to enhance member engagement has taken an interesting turn in the retail segment of the industry. We are seeing product innovation where MySuper is being delivered ‘D2C’ (Direct to Client) via web delivery channels and member engagement is being engineered into the website using ‘gamification’ principles that enhance the overall experience. An entirely new landscape is opening up – we can now realistically envisage members being drawn back to the fund website to check their superannuation point balance, tweeting their progress and ‘liking’ their fund on Facebook.
MySuper is offering the industry and members opportunities beyond its beginnings as a simplified default option. Whatever the product design approach taken, or the role MySuper is allocated to fill, the new regime presents the opportunity to leverage technology to enhance new propositions with a view to delivering improved member services and product offerings.
How is your organisation going to leverage the MySuper changes to improve customer engagement and consolidate product distribution capabilities?