Australian superannuation funds in both the industry and retail sectors are pursuing necessary changes to their business' strategic priorities, as they overcome regulatory changes.
Superannuation leaders representing industry and retail funds discussed similarities and differences in strategy development on the second day of the Association of Superannuation Funds of Australia's (ASFA's) National Conference in Sydney.
Specifically, both sides of the industry highlighted technology and advice for retirement as key strategic priorities for the next five years.
Sunsuper chief executive and ASFA chair, Tony Lally, told delegates that technology was a critical issue for the entire industry.
"The given is SuperStream, which is something you have to do, but it's really beyond that where I believe the changes will be profound in our part of the industry because the changing needs of members and employers are going to drive how we develop the business," Mr Lally said.
Straight-through processing was also a given and will have an enormous impact on the skill set of a super fund's employees, where there will be less staff processing paper and more staff providing advice over the phone, Mr Lally said.
"Across the industry, we have a lot of inefficiencies we have to get rid of," he said.
"One of the big weaknesses in the industry fund movement has been the heritage system; it's not very well integrated. As an industry fund movement, we really have to work at integrating all of our systems to be able to do business with each other, as well as with our customers."
BT Financial Group (BTFG) general manager of super, Deanne Stewart, represented the retail sector and agreed that with the unprecedented change facing the super industry, technology was an area of focus to get right for its members.
"The challenge for all of us with all of the changes that are being made is how we use technology to provide a better experience for our members - a simplified experience but with the efficiencies that we need to drive out in the industry," Ms Stewart said.
"I know from BT's perspective, we are spending hundreds of millions [of dollars] to get this right."
The heritage of BTFG had grown up through several acquisitions, which was not unfamiliar with other retail funds, Ms Steward said, adding that BTFG had seven legacy systems over 200 applications.
"That is the challenge for us - getting rid of that complexity and really building our simple, great experiences for our customers, advisers and accountants," she said.
"The second part to that strategy is then integrating that with the bank so it's all there in the one spot, and that is paramount."
Another strategic priority for industry and retail funds was the capacity to service retiring members with advice.
"It's very difficult to see people going into retirement without advice, so we believe that everybody who goes into retirement will seek advice at some stage," Mr Lally said.
"It's about having the capacity in the business to be able to deal with those people as they retire. The challenge is you don't know when people are going to retire, and it's a very personalised issue."
Mr Lally said there was also an added challenge for industry funds to retain members during the retirement and pensions transition and understanding the role of advice within that process.
"We certainly see that as a future challenge rather than an immediate opportunity," he said.
Ms Stewart agreed that there was a need for advice before and during the retirement process.
"The history of BT has been working with independent financial advisers and accountants, particularly for customers that are pre-retirees and going into retirement," she said.
"The challenge for us, sitting inside a retail bank, is looking at that total customer base and [acknowledging] there are 17,000 financial planners in the industry yet there's 10 million Westpac Group customers. So how do we work with those customers to provide them with the right level of help, guidance and advice?
"That's a key element we've been working through."
Both super funds said they were working on strengthening and distinguishing their brands in the marketplace, as well as ensuring they had the operational reserves from a capital management perspective to remain financially strong and sustainable.
