Renee McGowan – Mercer’s Chief Customer & Marketing Officer, in the Pacific market, comments on how the digital age is shaking up traditional business models and the super industry is not immune.
Are you ready for the challenge?
The digital age is shaking up traditional business models and the super industry is not immune. Super funds must prepare for this now, or risk being left behind as the sector discovers that an ability to grow will depend upon a fund’s ability to deliver more personalised experiences, advice and solutions to members.
Technology continues to challenge traditional business models in the superannuation industry. As new competitors enter the market they have the potential to disrupt the super industry as we know it. The need for a technology-driven, service-oriented business model is heightening.
The rise of technology has empowered the consumer more than ever before. Consumers now have access to swathes of information about competing services and products, which they can buy online in a heartbeat. A dissatisfied customer no longer puts up with a poor customer experience, they will move on and ‘shout’ to the world about their bad experience, via social media, and superannuation is no exception.
When it comes to superannuation, Australians are a disengaged bunch. The average Australian is more engaged with computer games than their super. In fact, the average Australian spends 535 hours playing computer games each year compared to eight hours engaged with their super .
However, super funds should not confuse a currently disengaged audience with one who will not respond to more personalised and meaningful communication and services if delivered with the right technology, via the right channels, when, how and where they want it.
This digital revolution, which the industry has been a little slow to embrace, may just lead to a member engagement revolution in superannuation.
What’s specifically driving this consumer-empowerment may be unclear. Whether it’s smartphones increasing connectivity, the ability to ‘have it all now’ on digital channels, or social media giving consumers a voice like never before, one thing is clear: the consumer is in control in the digital age.
Technology driving a super revolution
Personalising superannuation, or creating experiences based on individual circumstances, looks to be a major sticking point in the future of the industry. Technology can help drive this evolution because it allows super providers to granulate data for each member and tailor a service to them, without the expensive labour cost. Marketing automation software, for example, will allow providers to communicate with members with more relevant information, more often.
Evidence shows this is on the industry’s radar: the vast majority of super providers (83 per cent) expect to personalise each member’s fund experience by 2025, according to research from the Australian Institute of Superannuation Trustees.
Big data will play a pivotal role in the superannuation industry’s technological evolution. In order to personalise members’ accounts, providers will need the wealth of information that comes from big data. This input will help software calculate what each member wants to know and when.
‘Big data’ and data analytics are not new, but the super industry has been slow to tap into its potential. The game has changed and for super funds to be serious and sustainable they have to catch up with the consumer trends prevalent in other industries.
Some super funds have made in-roads to improving their data analysis and insights, but relative to many other industries, the super industry is behind and this is an opportunity to be seized.
Using this information effectively will be an ongoing concern for the super industry for at least the next decade, but as more advanced software is developed, it should simplify big data integration, making the whole process much smoother.