A super technological revolution

02/04/2012

Introduction

We are in the middle of a super technological revolution – transforming both the front and back office. Modern technology is putting us in a spin, fundamentally changing the way that superannuation funds interact with their members and how they operate internally.

Technology in the financial services industry is evolving away from traditional perceptions of an expensive growth obstacle, to a necessary enabler of efficient business operations. Now the future of information technology is about linking all forms of processing and all back office systems so there is a constant exchange of information on the superannuation highway that can be accessed through multiple channels.

A smooth flow of real-time information between systems and super fund members is becoming commonplace. Providing members with access to information when and how they want it is a service reality.

The technology revolution is about super funds reaping operational efficiency rewards and enhanced member interaction; boosting member engagement, understanding and satisfaction levels.

How is technology transforming the front and back end of the business of superannuation?

It is maximising revenue and minimising costs

At the operational back end, an advance in workflow technology is enabling business to achieve much greater levels of operational efficiency. Modern workflow capabilities significantly reduce the need for manual and repetitive keying of information. Resources are freed up to perform other tasks, headcount requirements are reduced and human error is slashed.

Similarly, the architecture of modern technology means that workflow customisations and the configuration of new products can be performed internally, removing the need to commission and pay an external provider. Customisations can be made without the need for programmers, code changes and long timeframes. New products can be sent to market in weeks rather than months and minor configuration changes performed on an as-needed basis. Super funds now have the ability to innovate at a much faster rate, compete more aggressively in the marketplace and attract and retain member business.

New business means increased processing volume for systems to handle. For older systems this means spending money – in order to cope, funds must ‘scale-up’, replacing existing infrastructure with something more powerful. Modern technology, on the other hand, allows businesses to ‘scale-out’ on private clouds – large amounts of new business can be cost effectively processed by simply adding new elements into the existing infrastructure pool.

In addition, the more volume a fund accrues, the less practical it is to run disparate systems that demand an ever-increasing labour burden with the ever-present risk of human error. To eliminate these issues, technology now delivers the ability to replace several systems with one platform and have all information held on a single database.

However, undertaking a replacement of a business’ entire infrastructure is often too great an organisational change and too large a cost. The current trend towards employing Service Oriented Architecture (SOA) creates integration between disparate systems on varying technology bases. Modern technology allows systems to easily ‘talk to’ one another; information keyed in one system can seamlessly flow through to another. SOA has the power to allow a business to integrate with its current technology set-up while creating a means of communication between disparate systems. If technology infrastructure were China, with its varying provinces and dialects, SOA would be Mandarin – a common language.

Lastly, from a front-end perspective, modern superannuation administration systems give consumers the option to self-service – to access and alter their account information online, unassisted. This move towards self-service, in addition to being an attractive draw card to the online-savvy consumer, allows a business to scale its operations without scaling the workforce. Consumers can change their address details or enquire about superannuation account balances online, at any time.

It is helping to manage and reduce risk

With advances in the areas of automation and workflow, the need for large amounts of manual rekeying is eliminated. This reduces human error and vastly improves the accuracy of information.

Similarly, a single underlying database means that information is only keyed into one database and can be accessed across the organisation. Again, human error is greatly diminished.

Risk is also mitigated by developments in business intelligence. Systems have inbuilt intelligence that analyses data to identify trends and detect irregularities. Business intelligence works by allowing funds to perform tailored analyses to look for specific trends, draw on specific data, and also through automatic analysis of data.

How is technology making it easier for super fund members?

Technology is changing the way consumers engage and interact with their superannuation fund. By opening up the channels through which a member can access their information, funds are vastly enhancing member engagement. By having all information available through a channel the consumer is used to, such as a laptop, smart phone or tablet, it suddenly becomes more palatable and the average person – who may not have a great financial understanding – becomes more engaged with their superannuation and its balance.

Technology is playing an important role in controlling customer satisfaction levels. As technology benefits the business, these benefits trickle down to the consumer.

They can quickly and easily access their information in real time, online

While, providing online access to consumers enhances efficiencies for the business, it is also a ‘must have’ for the consumer. We have now surpassed the stage where some funds are providing their clients with real-time access to their information online and are now operating in an era where, if clients don’t have 24/7 access to their real-time information (balances, beneficiaries, personal details, etc.), the fund is simply not competing. The differentiating factor is no longer whether or not a fund is providing online access, but whether they have moved to the next level – mobile device enablement. Can clients access their information from their Blackberry or iPad?

Technology also facilitates a move towards individualising the client experience. Developments in the field of customer relationship management, with more accurate and detailed record keeping, as well as advances in business intelligence allows super funds to more closely tailor advice and investment recommendations to the needs of each consumer.

Previously many changes to account details were performed by filling out forms and faxing them through, and then a super fund employee would input the updated data. Now information can be inputted and accepted online, automatically populating the database.

As we sit at the crux of a technological revolution, the superannuation industry employs a polarised mix of old and new – one fund still uses paper based processes, while the other allows a member to make changes and updates from an online front end, automatically filtering the change through to the back end.

For example, a member gets married and her and her husband wish to allocate one another as beneficiaries on their different super funds. One is done in five minutes online, the other has to be printed out, completed by hand, and then signed and witnessed before being mailed. The process takes well over an hour to complete and well over a week to be processed by the super fund. The other fund immediately shows the change online. Which fund would you rather be a member of?

The ‘long’ scenario is rapidly becoming a thing of the past, as the front and back ends become intrinsically linked through modern technology.

Funds are providing better service

Although the majority of super account interaction is now expected to take place online, customer service is still paramount when personal contact is made with a super fund through the call centre. Modern technology is rising to this challenge by allowing calls to be answered through as few screens as possible. When a client triggers contact with the call centre, the customer service rep needs to be able to look at as few screens on their computer as possible to answer a query or make an update, allowing the customer to spend a minimal amount of time on the phone. So, as a faster and more efficient call centre experience equates to cost and labour savings for the fund, it also means a more satisfied customer.

Benefit the business from within and benefit the end customer

Advances in technology that bring about benefits for the fund will also bring value to the consumer in the form of fast and easy access to information, greater accuracy of information and broader product choice, amongst others. You can guarantee that any investment or change a super fund makes to benefit the internal operations of the business will inevitably benefit the end client, just as any innovation made to benefit the end customer will benefit the business too.

About the author

Roland Slee

Roland Slee

Managing Director, Asia Pacific

Roland Slee is the Managing Director, Asia Pacific for Bravura Solutions based in our Sydney office. With more than 25 years’ experience in financial services IT gained in Australia, Asia and Europe, Roland has a wealth of experience in consulting, sales and management, and a strong technical background. He works with key clients such as Commonwealth Bank Australia, Mercer and Perpetual to ensure their systems deliver the rapid product innovation and enhanced operational efficiency they need to succeed.

Roland’s responsibilities include accelerating growth, developing new lines of business, implementing major change programs and leading merger and acquisition activity in the region.