The shape of the superannuation industry in Australia has changed remarkably over the past twenty five years, since the introduction of the Super Guarantee Charge in 1992. Originally just three per cent of salary was mandated to be invested in superannuation. In 2014 this has risen to 9.25 per cent and is scheduled to continue to grow to 15 per cent. In 2005 the introduction of choice of super fund pointed to the start of a battle for members, and gave impetus to the growth of new funds that were historically unrelated to members through their employers.
The shift away from defined benefit funds to accumulation funds has moved the risk of managing retirement income from super funds and employers to individuals.
Consequently, most members are taking a much more active interest in their superannuation from much earlier ages. This new level of interest has brought about the need for higher levels of member engagement, improved customer service and new products and services that better serve members’ changing needs.
The impact of all these changes has contributed heavily to shaping the superannuation industry we have today, and there is no reason to expect that further change will stop any time soon. We need to expect that the future will look quite different to what we see now. We could well see many traditional banking services, together with non-traditional financial services, offered by super funds, as well as infinite choice and diversity within the funds themselves. We’ve seen the beginning of additional choice develop within super funds with the introduction of member directed investments. Issues of aged care also seem to be a natural progression for super funds to diversify into, and will become increasingly important as the population ages. Traditional banking services like mortgages, personal loans, etc., could well be another direction for diversification in super funds. Whatever the direction that the industry takes, technology will play a key role in that development, by enabling cost effective and nimble innovation.
Over time those super funds with “customer centric” technology will be best placed to innovate and better meet customer needs. The very same technology will have the potential to deliver operational efficiencies to enable funds to provide competitive products for an audience becoming ever more aware of the cost of their superannuation. To me, the final piece of the technology puzzle will be the ability to harness the power of the data to really understand members, their habits and their needs. With this analysis available, member needs won’t just be met, they will be anticipated.
Technology has the ability to deliver a real advantage which will give superannuation funds sustainable strategic benefits over time.