By: Andy Slade
At the recent My Platform Rules conference in Australia, there was much discussion about how the Australian superannuation industry is at a crossroads; it must find a way to shape itself for the future and take advantage of the digital revolution. This post looks at the challenges super funds face to develop sustainable and adaptable operational models that meet the future needs and expectations of their members.
Before I hit on the main challenge, it’s important to first understand that member benefits, where funds want to be focused, are best delivered when operational and investment processes are optimised. This provides an opportunity for the industry to lower fees and improve investment performance.
Improved data accessibility benefits funds in the long-term. It enables informed decision-making, better risk management, and improved timeliness and accuracy of reporting to members, regulators, and investment teams.
The big challenge is that right now, super funds don’t hold all data in-house and outsourced providers cannot supply on-demand, aggregated, holistic information. This makes accessibility to investment data challenging.
Conference attendees felt technology could be an enabler to overcoming this challenge. Different funds will use different technological models, e.g. fully outsourced, software-as-a-service [SaaS], complete in-house technology operations, or a combination of these, but tech is the answer to data accessibility. Whether these functions are taken in-house for investment teams or taken instead to investment committees that guide manager mandates, investment decisions, exposure data analysis, and portfolio modelling all require immediate quality data.
Whichever tech model is used, the super funds that succeed in accessing quality data and drill-down capabilities save time and are in a better position to focus on member benefits.
To learn more about Australian super funds and learnings from the My Platform Rules conference, read “It’s Your Data: Super Funds to Meet the Challenge: Part 2”.