Last week the federal government released a set of new user-friendly online tools for Australian small business to on-board a new employee. At this point you are probably thinking, ‘so what?” and ‘what does that have to do with the superannuation industry?”. My answer is – everything. Now up to 2 million small business owners in Australia no longer have to focus on translating government regulations such as pay and conditions, tax and super or even employee entitlements. An online checklist and other associated products means that the guesswork has been removed and a new ‘decision tool’ guides small business owners through federal and state laws that apply for new employees. The federal government has been able to provide a check list, online portal, online clearance house, electronic record keeping system and totally streamlined superannuation administration system for the millions of people employed by small business in Australia. It’s all there online.
All of the hard work that has been completed for larger funds and employers is now translating into potential productivity benefits for small business and this is no mean feat. It comes at a fortuitous time when actual small business numbers are rising, and so does the call from major industry bodies to lift our productivity levels as we face being overtaken by our Asia Pacific neighbours.
Australia is lagging behind its counterparts when it comes to innovation, and overly time consuming red tape is a major detractor for innovation. The Australian Innovation System Report 2015 revealed Australia is ranked 27th in the world and well below the OECD average (The Global Innovation Index, Cornell University 2015).
It is however important to remember that it is these initiatives for the employers and fund members of Australia that will pay off for the industry as a whole in the long run. The government is well and truly on board and leading the way in ease of use initiatives.
So whilst for many of us we head into what we thought was the pointy end of superannuation legislation reform, in a nutshell the federal government has set the bar higher for us all in making it easier to do business with for the larger employers as they record and facilitate the administration of superannuation for members.
Members have never had more control over their funds than ever before. Checklists, calculations and a better experience have been set as a benchmark by the government. It will be interesting to see what our industry does next for larger employers needing an enhanced digital footprint.
Here at IQ Group we have a large, diverse and highly qualified team of specialist Consultants who are all very different. They have deep industry knowledge, a great breadth of experience and a ‘can do’ attitude in terms of pragmatic thinking and outcomes.
Whether deployed at a clients’ premises, or working from our network of offices, we want to share some of the key points with which you may not be familiar when you engage IQ Group.
- The IQ Group team in Australia is made up of over 100 wonderful people. Across the team, 25 different languages are spoken. This truly multicultural group not only speaks technology and finance ‘lingo’ but also spans English, Persian, Mongolian, Zulu, Farsi, Hakka, Nepali and Gujarati. We are part of a global family of consulting companies, all key players in the financial services arena. Our South African big sister is over 700 people!
- There are approximately 1000 years of specialist Superannuation and wealth experience that resides with us. All backed by methodologies and approaches that have a high value impact for our customers. We can lay claim to be truly ‘industry experts’.
- Our client history is significant. We have held successful working relationships with clients for over 15 years. Over the last 5 years, over 87% of our clients have asked us to help them on multiple initiatives. In just one of our domain areas, we have undertaken the data movement of over 10 Million members in 50 separate migrations!
- Currently we are helping over 30 customers across Superannuation, Banking, Insurance, Wealth Management sectors. There are 6 active Digital related programs underway.
- We know our Digital Engagement study is of great value to the market, because it is quoted by other consulting organisations! Our next survey will be bigger and set the benchmark for trusted information about customer engagement and industry transformation.
Over the past two years or so funds have invested heavily in their digital strategy with many of the ensuing programs coming to life.
Our observation is the days of introducing the next best technology are now behind us and many funds now have a holistic technology strategy in place, implementing the tools that drive and support the member journey.
As disruptive technologies, they can enable greater interoperability, intimacy with the customer and building a meaningful conversation with members
With this progress has come a realisation that many of the approaches and technologies will come with integration challenges. The need for data analytics and real time data presentation layers to customers are posing real challenges to contact centre platforms, CRM systems, and payment and record keeping systems. Gartner’s model of Pace Layering (systems that move at differing cadences) is looming large in the minds of technology leaders in major funds!
Together with changes in administrator operations, platform or services integration demands, is placing real strain on back end processes that have developed over time in response to technological, organisational and regulatory change. I call them the invisible activity. The danger here is that many of these invisible work- arounds in the operation will continue, become increasingly necessary, more complex, and become reinforced through the need to “get it done”. This has the real potential to bake in cost to the future organisation, without it being necessarily visible to operational management.
The customer -focussed organisation is one that will look at all aspects of customer experience and value. This means taking a forward view of operational efficiency, and making investment in value add activities to engage with customers in the most meaningful way.
Top Tips for Innovation and Digital Change:
- Be open to understanding the total impact of Digital or major technology change, and the differing needs of the application portfolio
- Implement a learning and improvement loop that sits beside this change – with your team a part of this.
- Understand the longer term cost of these technology approaches in services integration and back office processing.
- Baseline your understanding of efficiency levels and where possible look to benchmark this with your competitors – improvement only occurs from an agreed base.
- Take guidance from your customers – they often know what they want before you do
The battle to win the customer is about a clear statement of value, and delivering on that promise.
Watch out over the coming months for our Annual Superannuation Industry Digital Engagement Study.
Our focus remains on the Member experience landscape, and types of technologies that the sector is using to achieve their customer centricity.
IQ Group recently hosted a table of leading lights in the super industry at the ASFA address in Melbourne. Our table included Philip Hind, a key influencer of the development and implementation of SuperStream. Philip, who is leaving the ATO in May, has been the most important individual in getting SuperStream to where it is today – complying contributions are over 85% and employers are saving hundreds of millions of dollars. Understandingly he was singled out by ASFA CEO Pauline Vamos who paid tribute to his achievements.
Addressing the attendees also was the Assistant Treasurer and Minister for Small Business, Hon Kelly O’Dwyer MP, who continued to outline the Government’s determination to press ahead with a range of superannuation and financial services initiatives. We may be heading to an election sooner or later this year, but the Government has made it very clear they have a program to implement.
In recognising the growing profile and importance of superannuation, Ms. O’Dwyer also underlined the Government’s intention to maintain and improve our world-class superannuation system. In her speech, Ms. O’Dwyer also released the Government’s proposal for the legislative objective of superannuation – supporting the recommendation of the Murray Review for it to be “to provide income in retirement to substitute or supplement the age pension” but not for intergenerational wealth transfers.
Ms. O’Dwyer mentioned that the Government will also be moving to extend the rights of individuals to choose their own superannuation fund, a right that doesn’t currently exist for everyone covered by an enterprise agreement. Since making these comments, the Government has introduced legislation to the Parliament to achieve this.
At the same time, the Government has also introduced new disclosure measures to Parliament, to require disclosure of the details of a super fund’s assets, and the publication of a product dashboard for many more funds – so that consumers can better compare the investment returns and risks of different products.
Also outlined to attendees was the intention for the Government to continue to negotiate the governance reforms with the Senate. It was interesting to hear Ms. O ’Dwyer’s, view that she expected the measures to pass. These are the reforms that will require super funds to have at least one-third independent directors (including an independent chairperson), and to meet higher governance standards. Interesting times indeed.
Also foreshadowed – and which the Government has subsequently delivered – Productivity Commission reviews into the competitiveness and efficiency of the superannuation industry, and the development of a new model for the selection of default super funds.
Perhaps most interestingly – and this hasn’t been picked up in the media – M O’Dwyer said that she wants to improve superannuation outcomes for women and people who have had a career break.
The Government has heard a range of suggestions on how we can bridge this gap. They range from superannuation on government payments, to more flexible contribution rules to facilitate catch-up contributions.
The challenge for us now is how we can target changes to where they will make the most difference to savings behavior and retirement incomes.
This hasn’t been flagged by the government before in such clear terms, and reflects a desire to re-focus the system on everyday Australians.
This is an ambitious program that will translate into much implementation work for the super industry, and those of us who are there to assist it.