12 June 2017
Media Release: Going Digital – super funds hungry to expand their provision of digital advice
A new survey assessing the digital readiness of superannuation funds in Australia has revealed significant appetite to expand their provision of advice by digital means, however many funds still have work to do.
A new survey assessing the digital readiness of superannuation funds in Australia has revealed significant appetite to expand their provision of advice by digital means, however many funds still have work to do.
While 80 per cent of funds surveyed recognised digital advice as an absolute must, only 20 per cent of them so far were investing in it. However, this percentage is double what it was just four years ago.
The survey, of 15 major Australian super funds, representing about 30 per cent of the assets of APRA regulated funds, was conducted by the Association of Superannuation Funds (ASFA) Research Centre for Decimal Software.
The survey also found 80 per cent of funds had been developing a digital program for less than three years and 15 per cent of funds were only just starting that work. Most funds surveyed had spent $2 million or more on digital projects.
Investment until now has focussed on foundational capability, in areas including new websites, member online experience, calculators, data analytics capabilities and upgrades to administration systems.
Less than 30 per cent of funds have started implementing an enhanced mobile experience for their members.
ASFA CEO Dr Martin Fahy said funds were still mostly making use of traditional methods to engage with members and only a minority were making use of mobile apps.
“The survey showed the main impediments to implementing digital advice were business case and access to resourcing,” he said.
“Regulatory requirements and the cost of implementation are also a deterrent.
“It is clear that regulatory and policy changes have crowded out innovation. Industry estimates suggest various regulatory changes have involved capital costs for the sector of between $2 billion and $3 billion.”
Decimal CEO Nick Pollock said the starting points for digital advice were calculators and engagement tools and the key drivers were better outcomes for members, cost effective delivery of advice, providing member education and the retention of funds under management (FUM).
The metrics being used by funds to measure the success of digital tools include: the retention of FUM and members; open rates; click through on emails; unique versus repeat visits to websites; active member choice, direct investment choice; additional contributions; take up of tailored insurance arrangements; and, take up of advice.
For eighty per cent of the funds surveyed, their digital journey had started and stopped with calculators.
Funds reported the main barriers for their members using digital advice were: that it was difficult to understand (50 per cent); took too much time and effort (35 per cent); and, there was a lack of trust (28 per cent).
Funds also said it was critical for digital advice to be compliant, mobile responsive and easily integrated.
In terms of future priorities, funds identified straight through processing, dealing with insurance claims and member online services as key.
Mr Pollock said investment in digital delivery had the potential to deliver meaningful engagement and improved member outcomes.
“Multi-channel digital advice offerings via compliant and automated advice platforms would enhance fund brands and reputations,” he said.
“Going digital can lift engagement and help drive retention of members and grow their balances.
“It offers a recipe for successful and welcome innovation.”
Mr Pollock said Decimal research had shown 70 per cent of members engaged with digital advice were on track for an ASFA standard comfortable retirement and funds offering digital advice were demonstrating around 20 per cent more member retention.
A report detailing the results of the survey can be found here.
For further information, please contact:
ASFA – Teresa Mullan, Media Manager 0451 949 300.
Decimal – Luke Derbyshire, Spoke PR 0488 664 246
About ASFA
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system so people can live in retirement with increasing prosperity.
About Decimal
Our purpose is to make financial advice more available to all Australians via digital advice solutions. We partner with banks, superannuation funds and fund administrators already entrusted with customer’s funds and investments to deliver advice to the community as a whole.
