According to Martin Spedding, Executive Director, DST Global Solutions Bluedoor, âThere is no legitimate reason why the superannuation industry cannot undergo the same revolution that the banking sector experienced with the introduction of internet banking. Australian industry players have been operating with a patchwork of administration systems developed organically over many years. This approach continues to require costly integration between multiple systems and multiple providers. Promised efficiencies are rarely realised and most are abandoned when the real cost becomes evident. Decisions to scale back integration leads to increased overhead for the life of the platform which can run for 10 to 20 years.
âWe have clients implementing a single technology framework, removing multiple systems from their technology environments. In return, they are able to greatly reduce their administration costs within a short time frame,â continued Spedding.
The company further noted that the underlying goal for superannuation providers should not merely be to remove cost from the system, but to advance the design of wealth management products to cater for the changing needs of investors.
âThese improvements in efficiency have enabled our clients to focus on improvements to customer service and product innovation and, in some cases, roll out new, award-winning products to market such as investment guarantees and lifetime pensions that deal with longevity risk. These are valuable financial planning instruments and represent a win-win situation for all parties," said Spedding.
In response to the Cooper Reviewâs fast-tracking of technology reforms into the Australian Superannuation sector, DST Global Solutions argues that the technology challenges also provide the industryâs greatest opportunities.
Mark Cassar, executive director for the development of the companyâs Bluedoor wealth management solution, commented, âMost technology deployed within the superannuation sector has its origins in the late 1980s. When these systems were designed, the internet as we know it did not even exist. More contemporary solutions have been designed to provide real-time STP, and whilst significant efficiencies have already been realised, the Cooper Review offers us the opportunity to extend STP to an industry-wide context.â
DST Global Solutions believes electronic data transmission and processing of contributions and rollovers, together with automation of payment and receipting processes, are crucial elements of any strategy to drive efficiency and improved retirement benefits for everyday Australians. However many of the potential benefits could be difficult to capitalise on unless back-office systems can deploy an exception-based administration model.
Cassar explained, "Exception-based administration means removing the 'business-as-usual' case from the administratorâs in-tray, freeing expensive resources to deal with transactions that are problematic. Taking exception processing to a higher level, means putting in place automated follow up processesâsuch as emails and SMS alerts to employers, advisors, other rollover funds and membersâ for exception resolution before finally escalating to an administrator as a last resort.
âReal-time service for all parties is in operation now and the industry is able to further collaborate to achieve 40 percent or greater improvements in productivity and efficiency levels.â Cassar said. âWe believe that these meaningful cost savings are within reach in the next two years for the industry as a whole.â
Cassar also rejects the recent claim that technology re-engineering is only suitable for large operators and companies in the private sector. âOur open, single-technology framework is now being deployed in superannuation funds and wealth management organisations. Superannuation is mandatory, and we believe it should best be administered and managed in accordance with world best practices.â