We live at a time when technology is increasingly defining our success.
Technology has turned the need for innovation into a burning platform. New technologies (such as artificial intelligence (AI) and robotic process automation (RPA)), platforms (such as the New Payments Platform (NPP)), and analytics capabilities are reinventing superannuation by increasing member, regulator and competitive demands.
Technology is also enabling innovation. So much so that funds can’t innovate at today’s scale and speed without a strong technological framework, which will determine the speed, cost and risk of innovation.
In this environment, funds can’t move forward by fiddling around the margins with bolt-on technological point solutions. As EY recently observed in their EY Center for Board Matters, ‘Building a better digital future – disruption in the boardroom’:
“…organizations that want to survive the digital transformative age will need to do more than put digital wrappers around their existing brands and propositions. In order to compete they need to innovate continuously and be quick to establish sustainable and holistic digital ecosystems, integrating in-house capabilities with external approaches.”
To achieve that, technology needs to become as core to a fund’s operation as its people. Funds need to become technology companies.
‘Texecutive’ leadership groups
The first step on this journey is genuine ‘Texecutive’ leadership. In other words, executive and board leaders who not only understand the business, but get the technological landscape enough to:
- appreciate the impact of technology on the fund
- see the opportunities and challenges that technology is creating
- navigate complex decisions, including business transformations, regulations, partnerships and, potentially, mergers and acquisitions (M&A)
- manage the fund’s long-term performance.
Nurturing ‘Texecutive’ talent in the C-suite and boardroom is both an opportunity and an imperative for today’s superannuation sector. The reasons for this are simple.
Funds can’t hope to drive an innovative technology agenda if their boards and executives don’t have the technological insight, experience and skills to lead it.
Member-first technology strategy
These capabilities will position leadership teams to create and pursue the technology strategy that will deliver the right outcomes for the fund and their members… both today and into the future. They’ll have the expertise and willingness to confront the many complex and sometimes confronting questions that a technology strategy demands. Questions such as:
- What do members want – both today and tomorrow? At the same time, what are the prevailing regulator, government, community, partner and investor needs? Where are the gaps in our processes, our front office, our peoples’ capabilities and culture, and of course, the technology that underpins them all? And what do we need to do to bridge the gap?
- What is the right operating model? Is it best to insource or outsource? Or would it be beneficial to combine both in a hybrid operating model? This is where commodity work, such as administration, is outsourced, while the front and mid-office technology is insourced. It has the potential to give the fund far more control over their processes and member experience. It can also lead to greater agility and flexibility.
- How do we acquire the technological expertise we need to support the leadership group? Should these capabilities be insourced or acquired through partnership with a technology provider?
- What is the right mix of technologies, services and support?
- Are we better building, buying or partnering through a software as a service (SaaS) model, which can provide a flexible mix of cost effectiveness, shared risk, control, flexibility and scalability?
There are no easy, templated or ‘right’ answers to these questions. They will be different for every fund.
But, doing the hard yards and getting to the heart of these questions now could unlock a new world of member value and competitiveness. Failing to address them could leave funds fiddling at the edges. This will negatively impact every step they take from hereon in.
So, take your next steps carefully.