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Super funds taking up 'predictive' analytics

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By Tim Stewart
  •  
3 minute read

Detailed data analysis can allow superannuation funds to predict individual members' propensity to defect to other funds, cross-selling opportunities and member engagement levels, argues technology firm Empirics.

Speaking at a briefing in Sydney, Empirics chief executive Darrell Ludowyke said superannuation funds are fighting to remain relevant in a "continually fragmented world".

"Members have more options and there are a lot of threats to super funds. Using the data [well] can help achieve that goal," Mr Ludowyke said.

"It's using it to preempt decision-making and influence behaviour: don't just understand it, influence it," he said.

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Empirics, which was purchased by Link Market Services in 2012, has almost 20 superannuation funds as clients – with Australian Ethical being the latest to come on board.

Super funds can use the company's software to identify inactive members, high-value members, members who are likely to make voluntary super contributions and 'job change suspects', Empirics said.

A change of job is the strongest indicator that a superannuation fund member will defect to another fund, said Mr Ludowyke.

"Empirics built predictive data models to automatically identify, segment and target members that became inactive relative members that continued to be employed by the same employer," the firm said.

These members were at high risk of opting into their new employer's super fund.

"Empirics facilitated the personalised printing of targeted and timely communications to members via the client's print house to reach inactive members that had recently changed jobs," the firm said.

Campaigns launched by funds with Empirics between 2010 and 2014 saw a 39 per cent 're-activation rate' among members, 28,744 re-activated members and $110 million retained in funds under management, the company said.