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Institutions playing tech catch-up with SMSFs

SMSFs will increasingly challenge institutions to improve their use of digital technology, Deloitte Touche Tohmatsu’s expert in the area has predicted.

Major superannuation funds had been slow to adopt new technology compared with other parts of the financial services industry, but recently they had made headway in response to the rise of SMSFs, Peter Williams, chief edge officer at Deloitte Touche Tohmatsu’s Centre for the Edge in Australia, said yesterday.

“Historically, [superannuation] was fairly conservative. It was seen as a passive form of wealth management, then the rise of the SMSF came in and suddenly it’s a much more competitive and active space,” Williams told the 2014 SMSF Professionals’ Association of Australia National Conference in Brisbane.

He said SMSFs acted as a “disruptive influence” on the industry. Initially, they cost more to run than institutionally managed super funds and members received fewer services, he said. People mainly used SMSFs because they wanted to control their super and did not want to use the big funds, he said.

Advances in digital technology for establishing and auditing SMSFs have made them cheaper and easier to operate. SMSF advisers and promoters, using the Internet and social media, have improved engagement with, and services to, SMSF members.

“The digital age brings [SMSFs] into their own. We can now manage them effectively. They will continue in their upward march,” Williams said.

Williams, who founded Deloitte’s digital, web and mobile development business, which operates in 15 countries, said large super funds were improving their use of web technologies, but many still had a long way to go.

AustralianSuper recently delivered a digital offering to its members and now more than 50 per cent of its transactions were conducted online, he said.

Social media was a key area in which the large super funds had lagged, he said.

“The content tends to be about a football team that they sponsor [for example], rather than a customer service channel, but that will change … increasingly, people do want to engage with their super and if you start to think about engagement you can do more with [social media],” he said.

Social media interactions should be embedded across all parts of the business, including educational areas and customer service. It should not be restricted to public relations, sponsorship and marketing, Williams said.

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