Bravura Solutions recently conducted a poll with superannuation industry participants to gauge the state of play at the intersect of superannuation, innovation and technology. It is fair to say, from the results, that market participants understand the link between an ability to innovate and the technology systems they have available to execute such innovations. Most respondents identify a need to or plans to develop new products and capabilities but are not confident in their current systems to deliver those requirements. The good news, as we outline below, is that most funds are in the throes of technical transformation or on the path to change in the near future.
Innovation drivers and barriers
According to the poll, the main drivers of change and innovation among organisations is the desire to improve customer experience (87.10%), followed by the need for greater efficiency (70.97%) and the desire to reduce costs (41.94%).
Poor technology was identified as the key barrier to change and innovation, with almost half of respondents (48.28%) citing this as an issue. Other key barriers that ranked similarly included lack of budget (41.38%) and organisational issues (41.38%). Interestingly, operational risk associated with change and innovation was of least concern to respondents (13.79%).
With technology and social change driving innovation and disruption, it was revealing to learn where organisations were willing to place their investment dollar. Poll participants were asked to rank the areas in which they would make technology investments in the next 12-24 months, in order to remain competitive. More than two thirds (68.75%) nominated administration system modernisation as their number one priority, suggesting industry participants recognise the limitations of legacy technology in delivering the personalised, digital experiences members have come to expect. A further 40% ranked product innovation as their top priority driving technology investment, while 30% ranked member websites at number one.
Post retirement products
As large numbers of Baby Boomers tip over into retirement, funds are looking to provide more diverse offerings in the post retirement marketplace. However, when asked whether their current superannuation administration system could support the post-retirement products they want to launch to members, only one-third (30%) felt confident it could do so. Slightly more than half (53.33%) felt somewhat confident, while the remainder (16.67%) believed their administration system was insufficient to meet their product needs.
Digital experience capabilities
Less than one quarter of respondents (22.58%) felt completely confident their current superannuation administration systems could provide the capabilities needed to provide great digital experiences for members, such as real-time access and straight through processing. However, around two-thirds felt somewhat confident (67.74%), suggesting that funds have been making progress in this area. A smaller number (9.68%) felt their systems were incapable of delivering these capabilities.
Journey to modernisation
Given that business transformation and innovation rely heavily on core system capabilities, Bravura’s poll sought to identify where funds felt they were in their system modernisation journey. Just 12.90% reported having completed system modernisations already. A considerable number of respondents (41.94%) indicated they would implement a new system solution in the next 12 months, with a further 12.90% planning to replace their current system within the next five years. A few (3.23%) indicated they plan to take administration in-house within the next five years, while some felt modernisation was either not on the radar (9.68%) or not applicable to their organisation (19.35%).
Bravura’s poll highlights that the vast majority of super industry participants recognise that a modern, flexible next generation administration system is a key enabler for funds trying to meet the digital customer service expectations of their members. Many are already on or planning the transition from legacy systems to support competitiveness, with cost savings, efficiency and product innovation taking centre stage.