The Future of Superannuation: A Tech-Driven Transformation

It's all about the tech stack: the future of superannuation

"Super funds irrespective of their size, play a critical role in terms of the amount of member's money they are managing" says McKenna. "They are all looking at their operating models and they are all looking at their administration landscape as a place where they can make savings." While the buzz continues to be around the promise of artificial intelligence, he says it is SS&C's ability to apply technology, including AI, to the entire administrative ecosystem that is driving down costs for members. "I think everyone is still trying to understand the full potential of AI and what it can and can't do within that ecosystem," he says. "But in terms of reducing costs, we've done a lot of work around integrating those ecosystems". "If you think about it, it's not just the administrator - you've also got the insurer, the custodian and the trustee and in most cases, they're still siloed from one another." With integration comes the greater levels of straight-through processing. A recent project undertaken by SS&C with a large insurer, he says, is a case in point. "We integrated between our registry system and the insurers platform creating more straight-through processing and obviously there are more look-throughs making for a better experience around claims for members; it speeds it up the process and reduces costs." SS&C's other future facing application is robotic process automation which is used to streamline routine and repetitive admin tasks such as data entry. "This digital workforce allows us to reduce errors that come from purely human activity," he says. "If we can integrate all of this using intelligent automation software on top of the end-to-end processes, it is really helping us to drive down admin costs." SS&C, McKenna says, is also playing an enabling role in helping funds comply with regulatory requirements, focusing on automation and efficiency to support the all-important performance tests and lower fees. In terms of member engagement, the company is prioritising the personalisation of member services, using AI and advanced analytics to tailor experiences and engage members more effectively. "Simultaneously we're also exploring innovative approaches like the Metaverse to engage younger members, allowing them to look up information on products or even do a transaction via their avatar in the virtual world," McKenna says. "That's going to the nth degree, I think, in terms of where we're at. But there will always be a cohort of members who will want to use something like that to engage with the fund." Mary Delahunty, chief executive officer of the Association of Superannuation Funds of Australia (ASFA), says members now expect real-time access to their superannuation information in the same way that people interact with their bank accounts. This demand, she says, is driving significant technology growth within the sector. "How we engage with our bank account is what the super funds have had to manage towards," Delahunty says. "But as we all know, the back end of a super account is very different in terms of complexity to the back end of a bank account. "However, that is what people are expecting and demanding." She says the trustee offices of the future will need to put in place tech stacks that allow the administrator to plug into member engagement. "If you think about it, when you log onto your bank account you are essentially just looking at what you've put in the account and perhaps a little bit of interest and what you've taken out to pay for things. "People want the same access to the information in their super, but what you're looking at there is the unit price of your current interest in the fund. What is your insurance? What are your investment choices. "There's so much more information, but people are demanding that it be served up in the way that they are becoming used to." The desire for higher member engagement, Delahunty says, is now driving a completely different practice among administrators and the entire marketplace. McKenna says that the integration of super admin is the key trend going forward as members with greater access to API-enabled modern open architecture apps want to interact, not just with the administrators, but the trustees, the custodians and the insurers. "The ecosystem is integrating more as the members themselves are becoming more and more tech savvy and rightfully demanding," he says.

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US fund administration and technology multinational SS&C Technologies entered the Australian superannuation member administration market a short two years ago but is already carving out a dedicated following from funds that want to combine innovation with flexibility and scalability. The firm provides a range of services to support super funds, including member administration, digital assets, automation tools, and customised solutions. Flexibility in service offerings is key, allowing funds to manage certain aspects of administration in-house if desired. Lachlan Allardice, chief growth officer at SS&C, says that while the company has had a solid presence in Australia since the 1990s, it was an acquisition (or lift-out) of Mine Super's administration team that led to its foray into the local administration market. "We already had some good technology tools in the Australian market and we saw the SS&C business process outsourcing (BPO) as a natural extension of that given our global credentials," he says, referring to the company's main super administration solution. BPO, he explains, is aimed at maintaining non-core IT, process and registry functions, freeing up super funds to be able to focus on what matters most - their member outcomes. "Funds need to be cost effective and provide an efficient service to members because that obviously all gets passed through to the member. The industry funds are not-for-profits, so they try to manage their costs very tightly," Allardice says. "The trade-off for them becomes around moving up the value chain into the things that are really important to them." He mentions that funds typically aim to maintain control over critical moments for their members, such as handling insurance claims. "Some funds want to own that experience themselves now," he says. "For SS&C that means rather than playing a case management role, we might play the pure administrative role of paying out the claim and the fund insurer will do the claim assessment." Funds, he says, are in a regulatory environment - particularly in relation to the APRA MySuper performance test - where the pressure is on to manage funds as efficiently as possible. "The funds are under constant scrutiny to manage costs, and the APRA performance test is a huge focus for them," Allardice says. "They also want to maintain a positive member experience. We've seen over the past couple of years where member experiences have not been positive and how that has made its way into the news." While automation reduces touch, making funds more cost effective, issues around security and risk also mean that the role of the administrator is becoming ever more important. "We are holding member accounts and the record of those balances: it's something we need to keep secure, and funds value the security that goes with that," he says. "In terms of artificial intelligence and machine learning, funds' understanding of it and the application of it is becoming an interesting challenge. How do you manage it and utlise it? It's in areas like these that SS&C can help super funds." Mine Super chief executive officer Vasyl Nair says that over and above the considerable commercial benefit of partnering with SS&C, a move that allowed the super fund to reduce its fixed administration fee by 25 per cent in May 2024, the lift-out has seen a clearer focus on the areas that drive the greatest benefits to its membership. "SS&C's expertise has enabled us to accelerate our member experience programme through the introduction of new features and services to support digital journeys," Nair says. "Further to this, the extra capacity delivered into Mine Super by SS&C has allowed us to focus on product performance and the ongoing delivery of market leading investment returns to our members." Personalising the member experience, adds Allardice, is now a key trend in the Australian super industry and one which is set to dominate for the foreseeable future. "People no longer want to call up a super fund and feel like they introduce themselves every time they have a problem," he says. "The fund and its administrator are using tools that know the member and know their experience with the fund. "It's this kind of tools and analytics that allows members to make the channel work for them - to get a quick and clear response to their problem - that is the future of the industry."