POWERED BY MOMENTUM MEDIA
Mergers and regulation slowing super innovation
Merger and regulatory pressures are slowing the rate of technological innovation in superannuation funds, according to SS&C Technologies.
Speaking at an international business review webinar, Jeff Arnold, director of sales and marketing at SS&C Technologies, said super funds were reluctant to be the first to innovate their operations because of the perceived costs of moving or transitioning to new technology providers and solutions.
“The c-suite, the board, the people within the organisation, they are busy, busy people, trying to combat all of these different pressures so having the time to really look at a new platform or a new provider is a big challenge,” said Arnold.
He also said super funds were naturally risk-averse and slower to digitally transform because they were in the business of protecting people’s money.
“So sometimes it takes brave leadership to really understand how some of these smart technologies are able to support their businesses in a way which allows them to leapfrog their competition and really differentiate themselves,” he said.
While there has been a historical lack of innovation, the merger trend was beginning to highlight cracks in the operational processes of super funds, Arnold said.
“As these funds merge, and become much bigger, the problems that they've seen historically double and treble so they're really having to look at new ways of operating and looking at hybrid models,” Arnold said.
Arnold described the hybrid model as outsourcing lower-value transaction points such as administration while insourcing higher-value operational components.
Recommended for you
In its pre-election policy document, the FSC highlighted 15 priority reforms, with superannuation featuring prominently, urging both major parties to avoid changing super taxes without a comprehensive tax review.
The Grattan Institute has labelled the Australian super system as “too complicated” and has proposed a three-pronged reform strategy to simplify superannuation in retirement.
Super funds delivered a strong 2024 result, with the median growth fund returning 11.4 per cent, driven by strong international sharemarket performance, new data has shown.
Australian Ethical has seen FUM growth of 27 per cent in the financial year to date.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
