Working smarter, not harder – responding to downward pressure on super costs
Sydney, 31 July 2014 – A panel of senior superannuation and financial services industry representatives has identified technology as one of the key tools available to funds facing mounting pressure to reduce superannuation costs.
Bravura Solutions Pty Limited (Bravura) – in conjunction with FST Media – recently hosted an executive round table entitled Keeping ahead of the super curve amid regulatory change and market convergence. Led by Bravura’s Head of Strategic Engagement John Burke, the event saw some of the financial services sector’s leading thinkers discuss current challenges facing the superannuation industry, the anticipated impacts on funds and the most viable responses.
Keynote speaker Grattan Institute, Chief Executive Officer John Daley, said a recent paper by his institute had identified superannuation costs in Australia as a key issue, arguing that fees were too high and needed to be significantly reduced. This view has since been supported by the interim report of the Murray Financial System Inquiry.
Daley said the quest to reduce super costs has implications for funds in terms of consolidation, digitisation and regulatory simplification. With respect to consolidation, he said the Grattan Institute paper recommended a competitive tendering process to determine a small number of default providers, similar to schemes currently run in Chile, New Zealand and Mexico.
Bravura’s John Burke said: “There was broad agreement among panel members that – whether or not such a default scheme comes into play – technology will play an increasingly important role in the future, providing the means for funds to proactively and significantly reduce their operational costs and pass these savings onto their members via lower fees.”
Grattan Institute’s Daley concurred with the panel’s view, noting that cost savings in the superannuation industry would – by necessity – involve an increasing shift towards digitisation.
Some roundtable panellists suggested that individual funds would benefit from platform consolidation and workflow efficiencies made possible by next generation technology. Others said funds should look to cloud-based computing solutions to achieve economies of scale.
Among the panel, there was consensus on the value of online technology in the realm of member empowerment and engagement.
“Panellists agreed that technological innovations should be employed to enable members to more easily access their fund, exert greater control over their super and make more informed choices about their retirement savings,” said Burke. “Members increasingly prefer the convenience and affordability of gaining self-service financial advice online, rather than meeting face-to-face with a financial planner.
“Going forward, it was felt that capabilities such as a ‘single point of view’ customer experience that aggregates products and services from multiple providers, mobile channels, member direct investment options and predictive analytics and calculators will prove critical to a fund’s ability to remain relevant to their members and competitive in the marketplace.
“As a trusted technology provider to the Australian superannuation industry, Bravura prides itself on partnering with superannuation funds and their administrators to address the key issues raised by the round table discussion. By working together, our innovative, practical and affordable software solutions can help funds significantly reduce costs, achieve true customer-centricity and ultimately improve the retirement outcomes of their members.”
To view the full round table discussion click here.
Bravura’s Head of Strategic Accounts, John Burke was quoted in this press release. To ask John a question regarding the release or to discuss it in more detail, email PR@bravurasolutions.com.