Recently ASFA’s CEO Martin Fahey called out that the trustee office of the ‘not too distant’ future will need to be much more sophisticated. He was referring to the increasingly strategic role that a target operating model plays in the reformation of funds faced with new operating challenges, underpinned with new or refreshed technology options.
At IQ, we are seeing this challenge every day – where our customers look to reflect their value chain in their approach to their admin ecosystem, investments and insurance. We echo Martin’s view, especially in the area of administration, where being a ’service integrator’ is becoming one of the key factors in member services delivery and efficiency.
Too often we see this discussion polarised and simplified. ‘Outsource’, ‘Insource’ or ‘Hybrid’ may be an easy way to paint what is a complex picture. It misses a key issue. Before a super fund decides on these things, it should consider the enterprise capabilities required, and more importantly, which ones it needs to own to be more than just a parity player in the new landscape.
Options for approach, a strong understanding of the future obligations and responsibilities, and continuing waves of regulation are forcing funds to carefully reconsider their strategy and try to clearly understand how their choice of capabilities/operating model impacts on member outcomes now and in the future.
There is no standard approach and each client creates an individual pathway to success.
For the last three years, IQ has worked together with funds to undertake some of the biggest changes in their history. What is common to achieving success, is fundamentally a strong understanding of strategy and how it impacts on a fund’s products and services and the capabilities that need to be changed or developed.
There are three key areas that support decision making, when it comes to any administration transition:
- Understanding legacy decisions
This is the less glamorous side of transitions, but is the area that derails them most. Understanding legacy operations and technology, means a conscious process of prioritising the new world, rather than just paving the cow path with new tools. In its 20 plus years, IQ has been a part of (what is now) legacy implementations and migrations. Understanding why certain decisions were made in the past is critical to making the right decisions for the future
2. Understanding how technology empowers service
The decisions about technology must be made to serve the fund and its members. To not challenge the assumptions about technology (which are mostly dated, here say/anecdotal or at worst prejudice), means that decisions are not data driven and are less likely to be future ready. It’s a costly mistake to make. Technology needs to be proven at both diversity and scale before being considered. However, it’s the successful integration of service and technology platforms that provides the value necessary for funds to remain competitive in the long term.
Our recent experience shows that achieving breakthrough service and efficiency in transitions, is not based on how “digital ready” a fund is, but how ready to embrace RPA and machine learning it is, outside the technology.
3. Understanding roles and responsibilities
The regulatory burden for funds continues to increase, as pressure is firmly placed on performance and associated data transformation and reporting requirements. Add to this complexity of transition approaches and funds are confronted with a varying array of roles and responsibilities.
In choosing which capabilities or operating model is best, a fund needs to be clear on the roles and responsibilities it will be taking on, under each approach. Each variation comes with a differing set of responsibilities. This applies beyond regulatory responsibilities to those around technology and service and how the two are integrated, both at the outset and in the years that follow.
The options for super funds are very broad. No longer are funds buying off the showroom floor as each option comes flat packed. It’s only with the support of trusted partners that a cohesive model can be built successfully (and without pieces left over).
Innovation occurs when the strategy is clear, capabilities are aligned and there is an operating model that flexes and bends in whatever direction is needed for future growth.
After 20 years in business, IQ is at the forefront of change through a deep understanding of superannuation legislation as well as current and emerging trends (be it economic, technological or social). We take a proactive approach to addressing the impacts of change in the superannuation industry and on funds of all categories and sizes.
Whether it’s a merger, acquisition, re-platform, technology refresh, change in service partner or a remediation exercise, IQ is the only consultant with strong domain expertise in superannuation; with an understanding of how current and emerging technologies integrate into service; and with an intricate knowledge of regulatory and legislative requirements.
Combine our tried and tested methodologies with our clarity, and the result is confidence and success.
CEO, IQ Group