Despite the long-standing history of private pension plans, superannuation was introduced to Australians over 20 years ago to help them support their retirement in a financially viable way. Fast forward to today; it is now a A$3.3T business. Over the last two decades, superannuation has become complex, highly regulated, and vulnerable to scandals. In addition, the directives from the commission regarding fees and transparency haven't made it any easier either.

Thanks to today’s ongoing digital disruption, the superannuation industry is experiencing a rapid shift in member expectations.

Members want more!

The primary need is for super funds to transform themselves from being transaction-led or product-led organizations to experience-led organizations. It isn't an option anymore. Super funds must make member experience a central priority to support long-term growth.

Here are four ways to approach this goal:

1. Don’t hesitate to leverage new-age tech ASAP!

Members are getting smarter and more savvy. They expect to be served more effectively – every time. They are graduating from basic service agreements to data-driven solutions that are personalized, relevant, integrated, easy-to-use, and secure. A recent study found that members want their funds to anticipate their needs, educate them, and help them make informed, data-driven decisions about their super money. Enhanced engagement can be fostered with improved insights that are delivered via a successful combination of data analytics, artificial intelligence (AI), and machine learning (ML).

The growing interest of super funds in transforming their member experience using cloud-hosted solutions and big data is gaining attention. Cloud-hosted platforms are increasingly reducing member fees and providing large amounts of free space to accommodate member data. By drawing actionable insights from big data, funds can cross and up-sell offerings as well as design new initiatives accordingly.

Not only trusts and trustees, but members have also benefitted from these new technologies, especially AI and ML – helping them make more informed financial decisions. Here’s an example:

Raiz Invest Super is a fairly new startup that manages investment for indexed funds. Through its mobile app, Raiz determines the risk appetite of a member by analyzing the correlations and patterns in their saving and purchasing habits. Based on this risk analysis, Raiz offers up to six different investment options to the member and charges less than $500 on a $50,000 balance to the fund.

The use of AI and automation has effectively lowered the “labor costs” associated with superfund management. And these lower fund management fees are what seem to have triggered better member retention rates.

2. It's all about saving money, and robotics can help!

This is important: The Productivity Commission has advised Australians that if they pay more than 1.5% of their total super balance in fees, they are probably being hit by the ‘fees-for-no-service’ exploit. For funds, reducing administrative costs (currently pegged at 40% of the total fee) and properly redistributing them should be immediate action items. An experience that pivots on greater transparency and the full disclosure of account-related fees has become the new litmus test for members.

Financial advice powered by robotic capabilities is the next service that’s piquing member interest. According to the ASIC Regulatory Guide, robo-advisors are becoming the preferred choice for many funds to provide low-cost, single-issue advice. Super funds are adopting RPA-powered tools to monitor super accounts, access research reports, and help members make better financial transactions. For example, a leading superfund recently digitalized the eight most common transactions used by advisers and investment managers to create risk portfolios. A text message is sent to the member whenever the advisor interacts with his or her super account, allowing him or her to configure account settings and authorize advised changes.

It’s important to remember that members may lack the time or expertise to manage their investments. However, continuous innovation enables startups or super-admins to understand different usage patterns and suggest customized investment plans to members. Super funds that plan to leverage new technologies and innovate are likely to provide better member experiences.

3. Don’t be socially marooned.

Social media continues to be the top choice of members for engaging with their super funds. According to a recent IQ survey, 90% of members engage with their funds via Facebook, and 84% turn to Twitter to manage their funds. Social sites like YouTube and Instagram have also made it clear that video is still one the best mediums to foster Australians’ interest. This provides important context for online interactions that will engage members effectively.

From website navigation to page consistency and device compatibility, super funds are judged on all parameters. It’s almost imperative for super funds to ensure their social media handles provide relevant and helpful information to the members. This includes having a full-fledged LinkedIn page dedicated to the whereabouts of members’ superfunds. (Note: More than 96% of super funds in Australia have a company LinkedIn page, which adds to their visibility across the web and helps them engage with their members easily.)

4. Don’t let your members succumb to cyber-crime click-bait.

The Australian Prudential Regulation Authority (APRA)'s Cyber Security Survey revealed that the superannuation industry faced material cyber incidents with increased sophistication and frequency. Nearly 75% of respondents reported that they needed escalation to executive management. Four years since then, super funds in Australia are still highly susceptible to cyber fraud. Large money pools, compromised process infrastructure, and low member engagement are among the top reasons why the industry exhibits vulnerability to cyber-crimes.

To combat cyber scams, super funds need to invest in augmenting their predictive and prescriptive analytics capabilities to detect known and unknown events that could lead to suspicious behavior. In the case of a cyber-fraud event, super funds should immediately freeze the potentially compromised account. Funds should guide members on reporting these fake billing scams to The Australian Competition and Consumer Commission’s Scamwatch or other legal bodies. Improving overall security will go a long way in keeping members happy and enhancing the overall experience they expect from their super fund.

Closing Thoughts

A member’s journey consists of multiple experiential touchpoints. From apps to smartphones and social media channels, members expect their funds to understand their varying requirements and deliver an optimized experience. Now, the onus is on super funds. The digital capabilities of these fund are directly proportional to member expectations. Ultimately, funds should not hesitate to improve their digital architecture, knowing it will foster positive member experiences in the future.