Why mobile apps will change the superannuation landscape

November 9, 2015

Author: Lucia Vuong

 

We have got a youth segment that lives and breathes digital, and for a category such as super there can be a natural disconnect

According to the Sydney Morning Herald, “The digital innovation frenzy that gripped the banks is now playing out in the superannuation sector as funds compete to manage Australians’ super assets — $2 trillion today and tipped to reach $9 trillion by 2040.” Along with this growth, and in part because of it, the superannuation industry is also facing a number of tough challenges.

Here are three of the dramatic shifts happening in the Superannuation industry and what you need to consider for your business.

1. Competition is increasing.

The government’s SuperStream reforms have made it much easier for consumers to switch funds. Peter Brook, CEO of Pillar Administration says that “socially engaged consumers would want to use technology to switch super funds the way they can switch bank accounts.”

With supermarket giants Coles and Woolworths moving increasingly into the Financial Services market, it seems only a matter of time before they start offering superannuation. “Aggregators” are also a big threat. These are mostly banks that are evolving to offer consumers their entire wealth management portfolio under one single screen.

“ANZ Bank’s Grow app for example allows customers to see their banking and super funds from a single login, and also consolidate their lost super by clicking through a series of prompts… Online bank ING meanwhile has leveraged technology to offer fee-free entry level superannuation and online access to accounts via the web or a mobile app.”

2. Digital natives must be engaged. 

The Age reported recently that Gen Y are the most likely to switch super funds. Not surprisingly, getting young people excited about their superannuation, which they won’t be able to access for at least another 30-40 years, is an ongoing challenge. Shawn Blackmore, Group Executive Service and Advice at AustralianSuper, says:

“We have got a youth segment that lives and breathes digital, and for a category such as super there can be a natural disconnect from day one… We are seeing the mobile app as a way to engage these segments and talk to them about things that might not necessarily appear to them to be related to super, but that will ultimately help them with their retirement outcomes.”

3. Knowledge is power. Transparency is key.

Lisa Claes, Executive Director, Distribution at ING Direct says “Funds need to become more transparent. people want an app so they can check their super balance every day rather than waiting to receive their annual statement in the mail.”

In a podcast about the ANZ Grow app, Peter Dalton, General Manager of Innovation at ANZ says “We’ve had some great feedback from customers. People going, ‘Putting my superannuation beside my banking, all of a sudden because I check my balance every day or every other day, I feel richer. I know I can’t touch it.” But when you think about it for a minute, a lot of this stuff that we do is emotional. You want an app that makes you feel good or an experience that’s great to use and that kind of thing. All of us who work, which is pretty much every one of adult age, every fortnight or month, ten percent of your pay goes somewhere else and for too many years we’ve just ignored it. It’s just gone.”

Grow-iPhones-Super

Why mobile is the answer

There’s no denying that mobile is changing the world. According to Blake Briggs, Senior Policy Manager for superannuation at the Financial Services Council, “Large, efficient superannuation funds that invest in their technology platforms now will be more competitive in the future. Small, subscale funds that cannot afford to invest in new technologies will struggle to compete.”

Some interesting mobile trends:

  • 89% of Australians own a smartphone
  • Over 40% of Australians either already use their smartphone as a credit card or would like to
  • 44% of smartphone users in Australia regularly use 1-5 apps (not including messages/mail)

Mobile is growing at an exponential rate. Those that start developing a good mobile strategy early will race ahead of their competitors, especially in an industry like Superannuation where opportunity is ripe for increasing consumer engagement.

 

How Arq Group can help

Arq Group are leaders in mobile strategy, design and development. We work with our clients to create intuitive, effective and engaging mobile experiences that make a difference by helping people get things done, be more productive, learn, grow and be entertained. We turn good ideas into great mobile experiences by building robust partnerships with great clients and nurturing our team’s technical and creative skills.

If you’d like to talk to someone about your mobile project, please contact us.

References:

  1. The Sydney Morning Herald: Super funds: Competition to drag superannuation sector into the digital age | September 2015
  2. The Age: Gen Y most likely to switch super funds | October 2015
  3. iTnews: Superannuation via the smartphone | June2015
  4. Haptic Generation: Survey: Australian Smartphone and Tablet Usage | February 2015
  5. EY Sweeney: Digital Australia: State of the Nation 2014