We are currently seeing a raft of digital services launching into the market to better support the financial services products Australian investors rely on to fund their retirement plans. These include financial planning tools, financial calculators, retirement fund projectors and budgeting templates for super funds, savings accounts, credit cards and term deposits to name a few.
What this broad range of digital services has then inspired is an increase in digital aggregation services, where a central digital solution can provide a holistic view of a member’s financial position – this is done by providing a snap shot of multiple super funds, bank accounts, credit cards and other financial service information on a single platform. For the super industry this information then becomes a very powerful tool for both members and organisations.
The rise of aggregation websites has been a direct response to the growing number of financial products Australians own, and the need for a holistic view of an individual’s financial position. This is something that members are realising they need in order to be able to make informed decisions on their financial future, which includes their superannuation savings.
To some extent all of this information has been manually harvested by financial planners in the past. Aggregation services however will allow members to automatically create and view a snapshot of their wealth management in a single site. When all this information is combined with online financial planning tools such as the financial calculators, retirement projectors and budgeting tools we mentioned earlier it is clear that this is something that will potentially benefit, educate and engage members and promote interest in their current and future financial position. Factors such as better member engagement and the increased interest in superannuation, may potentially result in increased contributions, pose a compelling argument for the provision of these services.
Is this something new?
Not really – we have seen these services provided in other countries, and now the first wave of these services are here. From mint.com in the US to locally available services like getpocketbook these services are now making an appearance in the Australian landscape.
These services are now coming into the spotlight as a result of improved technology and the ability to digitally gather this information (previously a manual process), increased product distribution and acquisition (meaning there are a multitude of products readily available to consumers) and the need for individuals to want a consolidated view of all their assets and financial information.
How do they work?
The first generation of these services rely on screen scraping technology. The user is required to provide a user id and password for each institution which the service uses to log in to the site posing as the user to extract/scrape the information needed from that institution.
Clearly, there are a number of potential risks for the individual, the service provider and the institutions involved. The primary concern from members is that their user ID and passwords are available to another organisation and this poses potential risks. Recently the Ashley Madison scandal proved how easily individuals with their own agenda can target and attack an organisation leaving its users vulnerable and exposed.
From this perspective the security levels within screen scraping and aggregative services should be taken into account to ensure that member’s details are protected and their sensitive information is not disclosed to unauthorised third parties, especially where finances are involved.
Director of Business Development
Ron Mullins is the author of the IQ Group Annual Superannuation Industry Digital Engagement Study and is pro-digital services and the agility that they bring to retail, industry and public sector superannuation funds.