21 November 2017

There is no denying the impact that fintech firms have had across almost every industry globally. Seizing upon fast-paced technological innovations, they have and are continuing to redefine the digital customer experience as we know it.

It is not surprising then that Australia’s financial services sector is attracting its fair share of fintech activity. Across almost every sector of financial services – banking, lending, payments, personal finance, investment and insurance – new fintech players are entering markets and influencing the direction, shape and pace of change. Though hampered by a lack of scale, their disrupting effect is already being felt by many traditional financial services providers across the industry.

Fuelled by these developments, there is considerable talk about the impact of fintech on Australia’s superannuation industry. Some industry participants regard fintech firms as potential disrupters who pose an existential threat to established players. Speculation is rife – are the likes of Google or Apple waiting in the wings for the right moment to wreak havoc on the industry? Will tech savvy start-ups outperform existing players in the innovation game? Other players regard fintech firms entirely differently. Rather than a threat, they see them as enablers who can assist traditional players to meet demands for more innovative engagement and greater efficiencies in the digital age.

These divergent views are reflected in the findings of the PwC2017 Global Fintech Survey. The survey found that 88% of financial services providers are increasingly concerned they are losing revenue to innovators, while more than 80% believe that part of their business is at risk of being lost to standalone fintech companies in the next five years. Yet, the survey also found that 82% of incumbents expect to increase fintech partnerships in the next three to five years.

What is missing from discussions about fintech activity in the Australian superannuation space is clarity regarding the nature of fintech and what is actually happening on the ground. Earlier this year, ASFA CEO Martin Fahy asserted that fintech is simply playing at the edges of superannuation, rather than having a major impact.

This whitepaper takes a closer look at the superannuation value chain to get a clearer picture of exactly where, why and how fintech is impacting the Australian superannuation industry. We explore the nature of fintech and what this means for established players. We show how your position within the superannuation value chain determines whether fintech activity represents disruption or enhancement to your business. And finally, we reveal which parts of the industry are most at risk and outline the key strategies superannuation participants can adopt to survive and thrive amid an increasing fintech presence.