Super funds urged to boost digital engagement amid loyalty slump

A study by Publicis Sapient and Adobe has highlighted digital transformation and member experience as urgent priorities for Australia's superannuation sector amid regulatory change and shifting consumer expectations.

The report, titled Turning the Loyalty Tide, surveyed 300 prospective members from 11 superannuation funds and reveals a low level of member loyalty, challenges in digital accessibility, and a significant gap in personal engagement with superannuation products.

Member loyalty issues

The survey found that 80% of respondents were unlikely to recommend their current super fund to others. Additionally, 20% said they would prefer to try an unknown provider rather than remain with their existing fund.

Concerns around accessibility standards are also prevalent in the sector, with 55% of super brands failing to meet digital accessibility requirements. This means potentially one in four Australians could be excluded from effective online engagement with their super provider.

The research further revealed that 74% of Australians do not know their current superannuation balance, suggesting digital engagement remains limited and there is further scope for technology to drive better awareness and connection with super funds.

Industry under pressure

According to the report, the industry is under pressure from several directions including increased regulatory obligations, rising consumer expectations, and a rapidly changing demographic profile as the baby boomer generation moves into retirement.

This, the report suggests, is driving superannuation funds to shift focus from simply managing assets to managing customer relationships more effectively.

"The major gap between super funds and their customers highlights the need for funds to improve member engagement. The focus on reform in Australia's superannuation industry is seeing historical 'set and forget' attitudes replaced by an expectation of fund performance both in delivering returns and value-creating strategies across a multi-decade horizon," Scott King, Director - Innovation & Growth, Adobe, said.

"It's now imperative that funds capture the attention of members, build loyal relationships and facilitate financial health and wellness across their working and retirement journeys."

Digital transformation and AI

The introduction of regulatory frameworks such as the Financial Accountability Regime and the existing Retirement Income Covenant place further emphasis on transparency and support for customers transitioning into retirement.

The research notes that the rise of digital-first competitors and regulatory changes, such as the post-stapling era and the extension of the Consumer Data Right, expose traditional super funds to further disruption.

The report indicates that personalisation is a substantial challenge for the sector. Almost half of participants (44%) found that their super fund's communication and experience were generic, while 32% reported a lack of tailored information.

Tales Sian Lopes, Head of Financial Services Australia & New Zealand for Publicis Sapient, pointed to technology investment and AI utilisation as critical factors for funds seeking to remain competitive in a changing market.

"Australia's superannuation funds must evolve their focus from managing assets to managing customers, at a time when they face one of the most dynamic operating environments of any industry."

"To succeed, the sector must navigate regulatory roadblocks, overcome structural challenges such as a reliance on third parties for customer management, and reverse a lack of historical investment in technology," Lopes added.

""While challenging, this environment will create huge opportunities for funds who are able to shift their mindset. The winners will be those funds that find new ways to do things quicker and cheaper by making smart investments in technology, harnessing their data, and leveraging AI to create the digital experiences that their customers are increasingly demanding."

Opportunity for change

Publicis Sapient and Adobe concluded that technology presents a substantial opportunity for super funds that are prepared to reimagine member engagement. By investing in personalisation, rewards programmes, and data-driven onboarding experiences, funds can aim to meet rising expectations and regulatory standards.

The report's methodology incorporated user research among 300 prospective members, setting a baseline for member perceptions and journeys through the industry's Digital Member Experience framework.