Since the ASFA Conference we’ve seen announcements from the Deputy Treasurer on the Quality of Advice (QoA), and the MYEFO release from the Treasurer, all with implications for the economy generally, and for Australian superannuation members specifically.
Possibly the most exciting news for all of us are the reforms flagged that will make it easier and lower-cost for Australians to access quality financial advice, at a time when a wave of decumulation approaches the $3.5 trillion Australian retirement wealth pool.
At the ASFA Conference, in the thrum of conversation between the keynote speaker session, the SuperAPI team became more convinced than ever that the industry is at an inflection point.
We noticed that:
- The old-but-still-huge news of the move by HESTA to re-platform on Grow continues to rumble across the industry
Key takeaway 1 – our instincts tell us that “tech transformation” is about to be “a thing” in super, just like we experienced in the banking sector.
- Advice, and specifically digital advice, is being delivered as a service by multiple technology providers and seems to be a new battleground for front-end experiences and also the less visible “CRM and customer analytics.”
Key takeaway 2 – with the complimentary QoA announcements, industry observers should note that while the large, global CRM and analytics solutions will be a prevalent part of technology transformation, the localisation and verticalisation of the platforms to the superannuation industry will mean large opportunities for expert and niche players.
- Member retention and engagement is king. Whether it be retaining an employee approaching retirement with a large balance, helping members understand insurance, or educating new-to-workforce members in understanding the critical nature of their choice of fund.
Key takeaway 3 – Everyone we met believed there was room for improvement in how members are retained, membership is grown, and funds under management are optimised in the interests of members; and that risks abound for those that don’t.
Superannuation funds can automate member retention and engagement today
Superannuation is an industry that deserves technology and user experiences to match its multi-trillion-dollar scale.
It’s been difficult under the current operating climate for funds to keep up to date with more modern technology and processes, leaving super fund members unable to meaningfully engage with their superannuation. Adding this to an endless paper trail of complex information gaps that cost employers and leaves members out of pocket at retirement through higher overheads and unnecessary fees – it’s clear that we are in need of an overhaul.
Significantly, increasing member engagement does not require a disruption of the superannuation industry, and further, a rapid modernisation of member experience does not require decades of member-funded infrastructure investment. By working together, industry leaders and policymakers alike can maintain and accelerate Australia’s leading global position in retirement wealth policy.
Empowering superannuation funds with technology through Treasury consultation
In the recent Treasury consultation for Payday Super, SuperAPI proposed several superannuation changes that were informed by the 40,000 employees each month that visit us online to complete their Superannuation Standard Choice Form; specifically, the need for greater engagement during the employee onboarding process, greater technological integration, and advocating for employee-centric, employer-focused digital onboarding software.
What we know today is:
- Data quality from manual entry or paper-based onboarding is a major barrier to achieving the Government’s goals of shifting to a higher frequency of SG payments.
- Employers who don’t have automated superannuation commencement software as part of onboarding have found the well-intended changes from the introduction of stapling to be a significant driver of costs for their payroll teams.
- The existing stapling API from the ATO, when leveraged through modern employer software with embedded superannuation commencement, can not only reduce the costs worn by employers and fund administrators, but create a better employee onboarding experience that affords them the time and the tools to make decisions about their superannuation.
A chance to align proactively and prepare for Payday Super
Starting now with some no-regret investments in readiness would result in a clear advantage for super funds when it comes to member satisfaction and employers’ efficiency to align with employees’ expectations for their super.
What can funds do today to be Payday Super ready?
- Payday Super Guarantee: The technology exists today to enable Payday Super by improving the quality of employee commencement data through fully integrated digitised onboarding. Employee tax and super member information is originated within payroll and HR platforms through the employee onboarding process. In partnership with super funds and the ATO, this data can be verified to ensure super is paid accurately and on time.
- Drive employer compliance focus: For a non-negotiable and important requirement for employers, super compliance is, generally speaking, manual and antiquated. The technology exists today to allow employers to meet their legal and record-keeping obligations with respect to employee onboarding and superannuation fund selection (including support for stapling, SMSFs and first-time fund selection). The SuperAPI platform, for example, is securely integrated with payroll software and adopts the regulated superannuation industry standards of stapling & SuperStream.
- Provide full super fund coverage: Your Future Your Super further enshrined the right for all employees to choose their own super fund (while improving the outcomes of those that don’t choose) via the introduction of stapling. Employees must be able to choose any superannuation fund as part of their onboarding process. Whether it be retail, industry, employee stapled, employer default or self-managed, all funds should be supported – employee choice should not be restricted through limiting options, or by the requirements of a commercial relationship with a super fund.
- Adopt technology that supports employees and members: Choosing objective and independent technology partners will help funds move quickly and compliantly while creating an unbiased environment for members. Look for technology partners that do not operate their own superannuation fund, as well as software that clearly identifies commercial partners within the platform with appropriate disclaimers and licensing.
Technology’s role in member empowerment
At the heart of SuperAPI’s ethos is the engagement of super fund members in making active choices about their future retirement savings. As many Australians’ second-largest asset, super should be easily manageable and transparent. Digitisation of superannuation processes not only puts choice back into the hands of members but also simplifies the complexities associated with fund selection and management.
Embracing a digitally-enhanced future
Superannuation’s new era hinges on technology that supports and accelerates our world-class system. SuperAPI is dedicated to leading this charge alongside employers, super funds, and their members.
Our vision is to create a secure financial future for all Australians; to achieve this, we need a superannuation ecosystem that is efficient, transparent, and member-centric.
