The New Payments Platform (NPP) offers the superannuation industry great potential to facilitate faster payments for the benefits of members and business and corporate customers. However, it will take innovation and collaboration to seize the opportunities. In this first report, KPMG in partnership with Commonwealth Bank of Australia explore the current complications, potential benefits for employers, funds and members and the opportunities to innovate from the NPP in the superannuation industry.
Key payments in superannuation comprise contributions to funds from employers, top-up contributions by members, and payouts by the funds – in cash to members or, more commonly, transfers to other funds. Unfortunately, the current lag between payment initiation and completion is between one and three days – which is hitting fund members in their wallets.
The NPP is set to completely revolutionise how Australian payments are facilitated, with data rich, near real-time transactions, 24/7. The NPP promises to boost payment efficiency for businesses, organisations, governments and consumers, cutting out administration complexities and reducing cash flow issues.
The four unique features of the NPP:
Australia’s $2.5 trillion superannuation industry1 and its associated stakeholders facilitate a vast and complex network of payments, which can be impacted by issues such as mismatched or misdirected payments, lost super and payment delays.
Super complexities to overcome with the NPP:
For each group within superannuation, it is clear the NPP can help resolve many challenges, in turn streamlining the payments process. However, seizing the benefits will require superannuation funds to identify pain points and innovate solutions – in the form of ‘Overlay Services’. If we describe the NPP as the ‘train tracks’ for delivering payments, the Overlay Services are the ‘carriages’, which are tailored solutions created by organisations to delight their customers.
Overlay Services developed by superannuation organisations could potentially include:
To develop innovative, impactful Overlay Services, participants in superannuation will benefit from taking a collaborative approach. The key is to engage early and to work closely with aligned partners and experts. For superannuation funds that seize the NPP’s potential, they have a chance to play a greater role in their members’ financial life than today.