The world we live in is changing at an exponential rate. Technology has become part of almost every moment of our lives.

In turn, it’s also heightened our expectations of the companies we buy from. As technology evolves, so too do our expectations of service providers.

On that score, superannuation funds are no exception. Superannuation success used to be defined by who was the smartest and most customer-focused. That’s now a given and the battleground has shifted to who has the best member interfaces and underlying systems. Soon, that will be a given too, and superannuation success will be defined by who knows their members best – that is, who has the best handle on their data.

That’s why digital transformation has been among the top strategic priorities for fund CEOs for the past five years according to PWC’s CEO Superannuation Survey.

It’s also why much of the investment in digital has, to date, focused on digital member touchpoints: websites, tools, apps, and chatbots. A recent Willis Towers Watson research study found 94 per cent of funds increased both their investment in digital technology and their use of digital in 2017 as a means of improving member engagement and education.

And, finally, it’s why funds are now increasing their focus on data analytics to enable a better understanding of member behaviours and preferences to improve products and services and enable greater personalisation.

But those investments, on their own, aren’t enough. To truly unlock their member outcomes and the value of their data, funds should be doing three things:

  • creating a streamlined, seamless, end-to-end operation mdash;an integrated technology ecosystem—by integrating the fund’s existing member-facing and back-office systems in a more efficient manner
  • driving greater speed and cost reductions in their back-office administration by increasing the application of robotic process automation and artificial intelligence
  • opening up the fund’s technology ecosystem to third parties to enable the provision of value-adding complementary member services through the use of Application Programming Interfaces (APIs).

These investments have the potential to join the dots between your operations, members and partners. By joining these dots, you can significantly raise your member outcomes, increase your ability to attract, retain and grow members, and streamline your operations. This, ultimately, means more sustainable funds.

Integrated Technology Ecosystem

The critical first step is to join the dots between your operations. This makes everything else possible.

Funds are increasing investment in digital platforms, but these platforms still largely exist in organisational silos. In a recent study by Mulesoft, financial services firms reported that they have an average of 1259 individual apps, but only 27 per cent of them are integrated or connected together.

The end result of this is a disjointed technology ecosystem which leads to slow, complex processes and disconnected data.

It can take more people, more time and more resources to fulfil even the simplest member requests or transactions. The more people involved and the more manual your processes, the more handoffs you will likely have in your processes, and as a result, the higher the risk of errors. Members will be burdened by slower, less precise transactions, which ultimately leads to dissatisfaction.

The inability to easily access robust data (which is locked away in silos) can also make it more difficult to analyse your data, understand your members and measure and improve operational performance.

To get the most out of their technology investment, funds must integrate their existing systems to create an end-to-end digital operating platform – one that connects member-interfacing technology with back-end processing and fulfilment systems.

This can be achieved by investing in technology that bridges the fund’s disparate platforms and applications, providing a central place for the services and applications that need to connect, enabling them to communicate with each other in an uncoupled fashion.

The benefits of doing this are many. Among them, the question of legacy becomes largely irrelevant, because the technology is doing all the orchestration and aggregation of data and transactions, basically integrating the old with the new. At the same time, all of the fund’s data is brought together so that it can be properly analysed. This combination of integrated systems and data will lead to improved member outcomes, efficiencies and a greater ability to utilise newer technologies such as RPA and AI.

Robotic Process Automation and Artificial Intelligence

This brings us to the second step – joining the dots with your members.

Over the past five to 10 years, we’ve seen a flurry of back-office platform replacements as funds modernise their operations. For the most part, funds are now operating on contemporary, digital administration platforms.

The next big opportunity involves deploying robotics to further improve not just the member experience, but administration efficiency and decision-making as well.

Robotic Process Automation (RPA) automates repetitive, manual and rules-based tasks to increase productivity and quality and improve the member experience. RPA is “dumb” – it essentially does what it’s told and needs structured and digitised inputs to work.

RPA technology is not new by any means and most superannuation funds use it to some extent already. They are attracted by the significant benefits RPA can deliver, as well as the fact that it can be implemented relatively simply and with minimal disruption.

RPA creates a significant opportunity to automate a wide range of superannuation functions. Take the back office general fund accounting functions such as allocations, adjustments, journal entries, reconciliations, and reporting. I’m not suggesting that a robot will completely take over this function, but it’s about reducing processing times of high-frequency tasks. People will still need to be proactively involved, but more for validation and assessment, resulting in further operational cost savings.

From there, the real untapped opportunity lies in the rapidly evolving field of artificial intelligence (AI), specifically, machine learning.

If RPA is “dumb”, then machine learning is “smart”. Machine learning utilises your data to imitate the way humans sense, reason, and make decisions. RPA is generally rules-based, but machine learning takes this one step further by learning from each interaction and applying those learnings to future interactions.

Machine learning has the potential to transform not just administration but the entire member experience in many different ways. For example, machine learning is being used in AML and fraud detection, where vast tracts of transactional data are analysed—at lightning speed—to identify and block suspicious transactions.

Then there is the application of chatbots and robo-advisers – probably the most high-profile uses of AI in superannuation today. By handling and structuring problems and questions quicker, chatbots can significantly reduce waiting times, improve the member experience, and reduce the number of inbound queries into the fund.

In short, they hold the potential to dramatically improve both efficiency and the member experience (if done right) by automating the answer to common questions. NAB’s virtual banker chatbot, for example, uses AI to answer more than 200 questions that were previously handled by contact centre staff.

But chatbots and robo-advisers have a serious limitation. They’re great co-pilots, but they can’t fly the plane alone.

Which is why having an integrated ecosystem is so important. To be successful with chatbots, you need to find the right combination of machine learning and human interaction to maximise the member experience. It’s vital that the experience is fast, accurate and seamless, and that can only happen if your operations are sound.

API

The third dot to join is between your fund and its partners: the companies you collaborate with to deliver services, such as group insurers. And APIs are now playing a critical role in achieving this.

APIs are something that everyone is talking about, but many are still uncertain about what they do.

Put simply, APIs allow disparate systems and applications to freely share data and communicate with each other.

APIs enable super funds to connect siloed systems and create a connected technology ecosystem comprising their own and third-party systems and software.

Importantly, APIs are becoming a key road not just to speed and efficiency, but to innovation as well. APIs enable funds to adopt new technology and integrate into their existing ecosystem, allowing them to keep abreast of technology innovation much more easily. As a result, APIs can take super funds into different markets, open up innovation, and enable faster product development and deployment.

The potential for APIs to improve both efficiency and member experience is significant. Consider claims processing. This is currently a disjointed process involving multiple parties – the member, the fund, the fund’s insurer, employers, lawyers, and medical professionals. By using APIs, a fund is able to connect all of these parties digitally. This has a number of benefits including:

  • creating a seamless end-to-end member experience
  • enabling straight-through transactions reducing the need for manual processing and interactions
  • enabling sharing of information electronically – document management.

Looking ahead

To date, most funds’ digital journeys have been somewhat disjointed. Investment in new applications and systems has been driven by different parts of the business, without the benefit of an overarching strategy.

To reap the benefits of that investment, funds should be targeting their technology investment in three areas:

  • creating a streamlined, seamless, end-to-end operation – an integrated technology ecosystem – by integrating the funds’ existing member-facing and back-office systems in a more efficient manner
  • driving greater speed and cost reductions in their back-office administration by increasing the application of robotic process automation and artificial intelligence
  • opening up the fund’s technology ecosystem to third parties to enable the provision of value-adding complementary member services through the use of APIs.