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Industry needs automation: Milestone Group
Australia's superannuation industry needs to reach a new level of automation to ensure the country's superannuation assets are safeguarded, according to Milestone Group chief executive Geoff Hodge.
Automation would also feed into the regulator's demands for a more efficient and transparent processes, he said.
Hodge said although the spotlight recently shifted to custodians and offshoring arrangements with the Australian Securities and Investments Commission's (ASIC's) 'good practice' guide released earlier in the month, the need for automation is industry wide and should be applied to superannuation funds.
"You can't limit the debate to those types of assets really - the same kind of thing applies with funds, and if you look at the number of funds (notwithstanding the industry's desire to rationalise), the number of funds is still growing," he said.
State Super implemented Milestone's PControl in February, which allows the super fund to validate result sets and de-risk its outsourcing process, according to Hodge.
He said superannuation funds could strengthen their relationships with third parties (including custodians) through automation.
"If there's anything that slips through the cracks, it can be resolved on a partnership basis before it creates some kind of downstream problem," he said.
Although some systems were now automated, the industry had been complacent in addressing some issues, including the use of spreadsheets, Hodge said.
He said products had been built on a product-by-product basis in the past, which led to disparate systems which were unable to handle the complexity of modern-day products.
"The generation of technology that the industry's been used to has all been designed to be operated by administration personnel, so it's designed from the perspective of automating the calculation and certain reporting, but it is just accepted that there are certain things that remain manual," he said.
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