Technology systems were crucial in creating frictionless processes that leveraged the SMSF sector against the rest of the market.
Bravura Solutions product management and strategy director Darren Stevens said technology was creating many opportunities for all players in the superannuation industry, thus the SMSF sector needed to think about where their sweet spot was in the value chain.
“Where are you going to be put under pressure? What is a commodity and where should I go to outsource that or streamline it? Do my systems allow for straight-through processing? Do I get access to the websites?” Stevens told the 2015 SMSF Association State Technical Conference in Sydney last week.
“You need to reduce frictions – you can’t send out paper for these guys to sign as forms anymore.
“[Processes] have to be done in an automated, electronic fashion and you need to try to get a broader environment for them to work in.
“It’s going to put you under pressure if all you are showing is their SMSF portfolio, so think more holistically about the whole wealth scenario to try to keep them in your ecosystem.”
He said the banks had used that approach for a number of years now, with the likes of BT Super for Life combining their clients’ bank account and super together.
“It’s been understood it’s more likely you will keep them in your ecosystem,” he said.
“This is all happening at a time where you’re under increased pressure and I think it will continue to build pressure on three key areas in the SMSF space.
“The first is around new business.
“The banks, the retail providers, platforms and big super funds are actively trying to get personal with their members to stop them coming across [into the SMSF sector], so how are you going to combat that? How are you going to attack that side of the market?”
He added those players were also actively targeting the retirement phase.
“[They’re saying we] take away all the hassle if you come back onto our platform and use our longevity products that we’ve created,” he said.
“Then there’s going to be price and margin compression, so you need to start thinking about where in the value chain that’s going to impact you.
“And there’s going to be increased transparency and increased pressure to do more straight-through processing on that back-office piece in SMSFs.”
Advice and servicing models were also key areas to consider, he said.
“How are you going to partner up with people who provide advice, how are they going to focus on the coaching versus the estate planning?” he said.
“How are you going to provide that out as a servicing model to your customers who are going to become increasingly reliant on digital, frictionless processes?”
