It’s time for superannuation to become a new kind of business. One that’s actively involved in customer’s lives, the nation’s longevity, and innovation. A superannuation fund that has a better business at its core. Time for superannuation trustees to reimagine themselves and declare a new purpose
It’s time for a disruption.
Traditionally speaking, superannuation funds in Australia have operated at the end of the value chain, placed there by government in a predominantly B2B model, sometimes interacting more with employers than individual employees.
Often super is thought of as an older person’s interest, relevant only in its delayed gratification, hence increasingly ignorable to younger generations. Super is, as it has always been, mostly front-of-mind only when someone begins a new job, or is about to retire.
Could it be more?
There are business reasons for superannuation providers reimagining their role, not just altruistic ones. With churn at 15% of 12.3 million working Australians1, and almost as many customers lost as gained, its relevance to individuals directly would go a long way to securing the longevity of providers.
As customers across industries have increasingly matured, they have grown to expect that all product and service providers deliver a certain standard of customer experience. Speed, convenience, transparency, personalisation and digital sophistication are now the minimum requirements of brand interaction. As it stands, superannuation funds have an enormous opportunity to improve member retention.
In the retail sector, providing good customer experience has been shown to lead to customers willingly paying higher premiums and failing at it has been the reasoning and subsequent catalyst behind the success of disruptor brands in the taxi and accommodation industries, to name just two.
For super, it is in playing a more active role with customers, rather than sitting passively in the background, as well as the increased touch points and meaningful interaction that funds will achieve brand loyalty.
What if superannuation funds truly reimagined their place in Australia’s society? Could they move from being organisations focussed on members, to focussing on individuals? And not just retiring ones at that.
Given their unique position, super funds have relationships with almost all working Australians at one point or another in their life. Yet there is little capitalisation on that fact. In certain circumstances, some funds are much more likely to value the relationship with employers over the individuals.
There are gaps in the market that superannuation fund providers could fill, however, to support individuals throughout their careers.
No longer do individuals commit to one workplace for their entire working life, which brings up “change of job” moments much more regularly than ever before. With automation of the workforce and the need for reskilling as society embraces robotics, this is likely to continue to change rather than decrease.
Individuals getting into the workforce, or coming back to the workforce face an increasingly fragmented experience. Couldn’t super funds provide the starter kit for ‘working’ to support members for what lies ahead?
With the data of nearly all working Australians and the assets to back it up, superannuation fund providers are in the optimal place to provide such resources and be such mentors. Moreover, it would mean embracing the member as customer, truly understanding customer experience (where many fall behind) and unearthing the power of the individual.
It would mean taking a different, more active position on the value chain.
There is also a place for superannuation to be at the forefront of innovation – both in terms of their customers and the broader superannuation industry.
Again, with the immense data resources at hand, providers are well placed to address and perhaps even solve some of the retirement issues Australia faces. Retirement gaps exist for many individuals and the average Australian does not have the amount of money needed to be self-sufficient after retirement.2 Compounded with an aging population, the burden put upon the Age Pension increases.
Women, and increasingly, men, leave the workforce to raise children, a task vital to the country’s future, yet are penalised for doing so in their later years. Women are also more likely to be in lower paid or part time positions, contributing to the discrepancy in balances by retirement age. With the gig economy growing, and self-employed entrepreneurialism looked upon favourably by upcoming generations, the Superannuation Guarantee does not cover everyone.
Innovative products that address these challenges would no doubt be welcome by individuals and society at large.
With fintech, regtech and insurtech all disrupting various industries, one might ask where is supertech? Playing a leading role in the superannuation startup scene could be beneficial to all parties, not the least, the customer. With the drive for transparency, customer service and digital sophistication that many startups aim for, and the ability to scale that superannuation providers would bring to the table, solving superannuation funds would surely be a natural outcome.
With today’s working landscape changing, alongside society’s make up, superannuation funds will need to adapt. Could it be more than cosmetic though, a true transformation in purpose?
None of these reincarnations are necessarily easy. Policy and regulation would need to be addressed and parameters changed. Super funds however are for member benefit, and there is an opportunity for individuals to engage in a meaningful and rewarding partnership with their superannuation fund.
In any case, a shift away from a focus on meeting prescribed benchmarks and aiming higher should be the goal of every provider. It should not be a case of waiting for the regulators to change the rules when things turn sour.
Stronger Super reforms, such as My Super, FoFA and Super Stream were all implemented to benefit members in their various ways. Now imagine a world where it’s the funds themselves that, in the spirit of those reforms, made things even better?
Sounds pretty super, doesn’t it?
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