In today's digital world, super fund members expect deeper insight and more proactive service than just an annual report. Funds must have a clear member engagement strategy, facilitated through new technologies, or risk losing out to competitors.
Super fund membership demographics are rapidly evolving – with Millenials paying in and Baby Boomers drawing out. Each new wave of customers expect more than the last, so the onus is on funds to engage their members in a way that drives long-term loyalty.
“There’s a lot of competition between funds to attract new membership and retain existing members,” says Matthew O’Keefe, Partner, Technology Risk & Assurance, KPMG. “That’s a really big deal for funds now.”
As explored in the KPMG Super Insights 2017 report, attracting and retaining members is just one of the many challenges, and opportunities, that Australian superfunds now face. Among them: developing suitable retirement income products; solving accumulation issues for women; sustaining member confidence amid tax and regulatory changes; and the complexities of cyber security in an increasing digital world.
These are all important, but member engagement is at the core. Without the trust of members – a fund simply cannot survive.
“By engaging with members, providers can connect them with extra services and, by demonstrating their abilities, build loyalty,” the report explains.
Technology savvy members are accustomed to 24/7 service and rich information from companies that goes beyond the core service offered. For superfunds to achieve this, a multi-pronged approach is necessary, with effective use of technology the clear differentiator between stagnation and success.
Sean Hill, Partner, National Leader, Superannuation, KPMG, says to think of a super fund “as an iTunes store”.
“What can they offer to their members when they pull up their super app?” he says. “How many services are they getting that another fund can’t give them?”
Sending members an annual statement, or a letter about a fee change, is not sufficient to keep them on board. Superfunds need a strategy to know their members on an individual level, to make more accurate predictions about their activities, and ensure that they are communicating with, and helping, their members in a relevant way. Technology is critical to developing a 'segment of one'.
“How can they make it easy for members if they move jobs? Do they make it easy for their new employer to contribute to this new fund?” O’Keefe says.
O’Keefe explains that digital channels are increasingly important to funds. It helps them market for new members, and offer consumers the ability to research a fund.
“There has been an increasing consumerisation of technology across all sorts of industries, otherwise known as the Uber effect, with people now used to social media and seamless delivery across channels through their mobile phone, call centre, and even physically,” he says.
O’Keefe says funds must look at the tools people use and whether they would be appropriate as methods of communication both before and during their time as members.
“Higher performing funds are really focused on their member journey, and understanding the service offering that a super fund is providing to a member,” says O’Keefe.
A strong digital communications strategy will communicate the right information to members at the right times.
“What information can we provide about their retirement needs? How can we help a member understand the financial implications of retiring? How do we help them understand what their current or projected balance at retirement is going to look like?” he says.
It is also about providing insights and assistance, to help them achieve more optimal outcomes.
“How will that (income) affect their lifestyle, and how can we take them on a journey of changing those outcomes – if they’re not happy with them?” O’Keefe says.
Creating greater member engagement through digital channels has vast rewards, but also risk, Hill explains.
“Cyber security is an essential requirement. Funds are still dealing with risks in many ways in terms of cyber,” he says.
Like with any aspect of engaging and maintaining loyal members, it comes down to building trust.
The KPMG Super Insights 2017 report and accompanying interactive dashboard are based on 10 years of APRA and ATO-published statistics. The dashboard contains interactive charts and graphs which can be filtered to view industry and fund metrics for a particular year or segment of the market and to view metrics for an individual fund in comparison to a peer group.
Matt O’Keefe and John Havers explore how superannuation funds can use digital identity technology to enhance customer engagement.