In 2024, superannuation funds had another impressive year, with assets surging past A$4 trillion. Meanwhile, the Australian Securities and Investments Commission (ASIC) took a firmer stance, warning funds that any lapses in member service won’t go unnoticed.
As we look towards 2025, SS&C has highlighted several trends that are poised to significantly impact the super fund industry in the coming year.
Meeting Member Expectations
It’s vital for members to feel secure that their super funds will be there when they need them most. The challenge for these funds is to proactively understand the needs of their members and provide exceptional service on a large scale. By using artificial intelligence (AI), funds can analyze vast amounts of member data to provide personalized advice. They also need to adopt flexible service models and offer multiple channels of access, allowing members to interact in the ways they prefer.
Regulatory Scrutiny is Increasing
Outstanding member service isn’t just about staying competitive—it’s a regulatory requirement. With regulators highlighting “widespread” delays in handling death and disability claims, funds are being urged to fulfill their obligations. Additionally, cybersecurity holds a high spot on the regulatory agenda, as funds face the dual threat of being targets for cybercriminals and incurring hefty fines for any data breaches resulting from inadequate controls. Compliance with APRA’s CPS234 is essential, and funds might also consider aligning with the global ISO 27001 standard or the SOC 2 framework for added security.
Digital Advice is Gaining Ground
As 23 million members require advice and there aren’t enough advisors to meet this demand, funds are increasingly turning to digital solutions to bridge the gap. Offering digital advice not only boosts member engagement but also reassures regulators that funds are attentive to members’ needs.
Enhancing Financial Wellness and Education
Members are looking for more than just a safe retirement—many are seeking guidance to enhance their financial well-being. In response, funds are increasingly incorporating financial education and literacy into their services. Thanks to modern technology, it’s possible to deliver personalized education at scale by utilizing data aggregation, automation, gamification, and analytics.
Opportunities Post-retirement
While superannuation is traditionally about saving for retirement, there’s now increasing regulatory pressure on funds to assist members in making their retirement savings last. This may involve developing new products or forming partnerships with life insurance companies to manage longevity risks, which require more advanced advisory services.
Managing Information Overload
Members are using their mobile apps more frequently to delve into the specifics of their funds, despite the growing volume of information. Transparency, look-through capabilities, and ease of navigation are crucial. Members not only want reassurance that their funds are investing in ESG-positive companies but also that an ESG focus won’t compromise their returns. AI can help funds articulate the balance between ESG factors and investment returns. Performance is also under scrutiny; failing APRA’s annual performance tests could lead to fund closures. Embracing technology to enhance efficiency is crucial to maintaining cost-effectiveness and boosting performance.
Keeping an Eye on Global Trends
The wars in Ukraine and the Middle East, the ongoing effects of COVID-19, political unrest in Europe, India’s emergence, and China’s growing influence have all substantially impacted investment outcomes. The near future could bring “trade wars” involving tariffs and uncertainty around interest rates and inflation. As super funds increasingly invest globally, it’s essential to balance international insights with local perspectives to navigate risks and opportunities effectively.
Innovation and Differentiation Opportunities
Superannuation funds are always seeking new ways to stand out, particularly in attracting younger savers. The metaverse, with approximately 400 million monthly users—80% of whom are under 16 and 41% of millennials interested in metaverse events—presents a chance for funds that can innovate with virtual reality technology to engage a tech-savvy audience.
The common thread linking these trends is the need for a modern, intelligent technology infrastructure. This will allow funds to meet member expectations, comply with regulatory demands, and deliver exceptional outcomes.
To explore these themes further and prepare for the upcoming challenges and opportunities, download the full report.
Mary Payne, Chief Product Officer APAC at SS&C Technologies, and Dan Renoux, Head of Product Initiatives at SS&C Technologies, also contributed to this article.
