Speaking to InvestorDaily, QMV Super Solutions chief executive Brad Goodall said many industry funds are adopting a ‘just in time’ approach to their APRA reporting requirements.
“It will definitely get you over the line [with your compliance] – but it’s not fantastic for your future state and how you’re going to manage the process moving forward,” he said.
The temporary solution of the industry funds will act as a 'band-aid' fix for the next 12 to 18 months, but as the banking sector ramps up its investment in technology the non-for-profit sector will soon find itself lagging behind, said Mr Goodall.
“We’re encouraging [industry funds] to continue to think about what they want now, what they want in the future and to try and build a bit of scale into their process,” he said.
The banking sector, conversely, has a huge amount of data at its fingertips – and it is looking to leverage off it with a big technology spend, said Mr Goodall.
One big advantage for retail players is that their superannuation customers often have a bank account with the same institution, he said.
Ideally, retail superannuation accounts will sit alongside a customer’s transaction account, said Mr Goodall – and as a consequence they will be able to 'advertise' themselves every time a customer does their online banking.
“Once banks nail that bit down I’m sure it won’t be too long until they put a ‘consolidate all your super’ button next to it,” he said.
“That will then go off and trigger a whole range of processes that search the ATO for any lost super money,” said Mr Goodall.
As a result of the technology spend by the retail sector, industry funds are going to have to have to work even harder to engage their members, he said.
“If all they’re going to do is send out a letter in the mail – rather than send something directly to a member's iPhone – they’re going to get left behind pretty quickly,” said Mr Goodall.
The next step for the industry will be to move member accounts overnight – something that used to take as long as 28 days, he said.
The fact that back-office automation has had to be forced upon the industry via the SuperStream legislation is "a bit sad", said Mr Goodall.
"If you sent money to me and said: ‘I’ve already hit the send button but you won’t get it for a month’, I’d be pretty upset. So why should superannuation be any different?" he asked.
