While rapidly evolving technology and consumer trends are pushing super funds to respond to changing member demands, many are struggling to meet these expectations due to legacy technology limitations. Interestingly, this market pressure is opening up alternative ways for funds to go about their business, delight their customers and compete effectively in a shrinking market.
Today, the vast majority of super members have evolved into a new generation of customers with a new set of consumer expectations. Tech savvy members demand easy, real-time access to their products and services at any time, from any location and in a manner that is tailored to their particular preference.
Traditionally, Australian super funds have had limited choices in terms of how they operate their business in response to technology and consumer trends. They either self-administered or outsourced administration to an ever narrowing field of third party providers. In either case, funds have been hamstrung by outdated legacy systems that support only the uninspiring, conventional delivery of standardised products and services.
Yet, we are now seeing greater choice emerge for super funds which, at least in part, has been brought about by their desire to keep pace with these evolving technology and consumer trends. Increasingly, funds are recognising that their response requires more than a simplistic system update or bolt-on solution. Instead, a complete transition from disparate legacy systems to modern, flexible and fully connected next generation technology is needed. Only the latest core administration technologies are capable of effectively and sustainably supporting mobile and digital delivery, sophisticated analytics, and responsive, personalised message-to-one communications.
Further still, some funds have recognised the rare opportunity to rethink not just their systems, but also their business processes and procedures. They have taken system modernisation one step further, redefining their entire operating model from the ground up to position themselves for success. A useful analogy is that of a dilapidated house. Sure, you could tinker around the edges with DIY renovations, but to create a truly comfortable, sustainable and contemporary home, it would be simpler – and in the long-term more cost effective – to bring the experts in and deliver a whole new building – pre-built and ready to live in. Already there are some super funds – and even administrators – adopting such an approach to design and create flexible, best-of-breed operating models that meet the specific needs of funds and their customers in the digital age.
Interestingly, this development is seeding demand for greater choice in the way in which super funds go about their business. Today, there are companies emerging that provide pre-built, end-to-end operational solutions that can be ‘dropped in’, ready for funds to begin administration. These solutions deliver business processes, administration software, IT infrastructure, data storage, CRM and marketing tools, just to name a few. There are also suppliers ready to deliver funds with selected components of these models separately. This new found choice allows super funds to adopt a truly modular approach to their business by identifying and focussing on the things they do well and outsourcing the rest to the experts.
The more astute funds and administrators are already heading down this path. Some are doing it themselves, others are bringing in specialists to manage the process. It’s entirely possible that in the not too distant future super funds will routinely pick and mix from a range of vendors to create, build and administer the operating model of their choice. The flexible nature of the model will make it much easier for funds to respond to evolving consumer and technology trends.
This is good news for super funds, who for too long have been denied greater diversity in how they run their business. It’s also good news for members, who will reap the rewards of innovative, best-of- breed approaches to delivering highly personalised customer experiences.