For many, superannuation is the key to a better life. It offers financial security in retirement, opens up possibilities and creates peace of mind. Recent legislative reforms aim to further improve member outcomes in retirement, especially by ensuring greater visibility into fund performance.
Another critical change in the recent Your Future, Your Super reforms means an existing super fund is linked or ‘stapled’ to an employee so it follows them whenever they change jobs. Employers must pay contributions into this stapled fund. This reduces duplicate fees and avoids new super accounts being opened every time an employee starts a new job.
Moreover, super stapling is expected to have an impact on member engagement as superannuation funds join other financial services organisations in the drive to personalise the customer experience. With customer loyalty now a critical competitive advantage, super funds must look to personalisation to attract and retain their customers.
There are three key reasons why member engagement is essential following the super stapling reforms:
- Many funds have lost their new member stream. Prior to this change, if an employee did not choose a super fund, their new employer would open an account for them in the employer’s default fund. This stream of new members has been turned off and funds need to find new ways to attract new members.
The reforms will most likely be beneficial to super funds attached to the hospitality and retail industries given they are the sectors in which most people get their first job. The challenge for other industry super funds will be to attract those customers and encourage them to switch funds as they progress through their working lives.
- The onus is on the member to make an informed choice. Education of members has never been more important. Stapling might have unintended consequences such as members remaining in underperforming funds or being incorrectly insured.
Again, there is a competitive advantage here for funds that can successfully engage with members or potential members about benefits and potential pitfalls.
- Higher member retention creates opportunity. Members are likely to stay with their fund much longer, leading to greater opportunity to build a trusted relationship that results in better outcomes and a transition to a pension product (rather than a lump sum withdrawal) in retirement.
However, retention will largely depend on the fund’s ability to engage with its members meaningfully and create loyalty. Where there’s no loyalty, a fund is vulnerable to losing members to competitors offering more personalised service.
Showing up at the moments that matter for better member outcomes
Members need to be engaged and informed to make better decisions for their retirement. Key moments that matter such as a change of job, a career break or reaching retirement age, are opportunities for meaningful engagement.
Bain & Company and Salesforce recently collaborated on a report, The Customer Imperative In Financial Services, which included three key no-regrets actions that financial services organisations can take to better serve their customers. They apply to super funds more than ever given the new regulatory changes and the imperative for funds to engage effectively in an industry that has traditionally been seen as disconnected from its customers.
1. Personalise the experience
Most people tend to be disengaged from their super. It’s often money they can see but can’t use for another few decades, so why be interested in it now?
And yet many consumers surveyed in the report support their financial institution using their data to provide a more personalised service or proposition. Here then, is a valuable opportunity for super funds to offer the kind of education and service experience that will help customers want to be invested in their retirement outcomes, no matter how far off they are.
Compliant personalisation is central to this opportunity. Indeed, the State of the Connected Customer report shows 52% of customers expect offers to be always personalised.
So when it comes to retention, for example, personalisation will involve super funds engaging with members on the channels of their choice, about services and products that are timely relevant for them. Think apps with notifications of when their employer deposits funds into their super, or updates about the concessional contribution cap.
Member acquisition might prove more of a challenge in light of super stapling, but super funds that align with their members’ values and get the messaging right around those values will have the advantage. More than ever, consumers are prioritising values, whether they be economic, environmental or societal. Indeed, Salesforce research shows that 89% of customers expect companies to clearly state their values, and 90% expect them to clearly demonstrate those values. People want the opportunity to invest with organisations that reflect the values that matter to them.
2. Take advantage of the preference for digital
Consumers have a preference to engage on digital channels, and this creates more opportunity for funds to show up in a low cost way. Having a member portal or app that is seamlessly connected into the member’s data allows the digital experience to be personalised, and transparency of information and process builds trust with a member.
Data is integral to creating a successful and personalised digital experience. For example, super funds might use data around how members are interacting with content — like an email campaign — to personalise future digital communications and even the website itself. For example, the homepage of a fund’s website can be tailored depending on which investment options a member is interested in.
A sure fire way to alienate a customer? Have them start a transaction or experience digitally, but then force them to have to contact an employee to complete it. While we’ll see below that there is still room for a real human voice, a digital-first approach will be essential to attracting and retaining members under the new super ‘stapling’ regulations.
3. Seamlessly switch from digital to human interaction
Listening to digital signals at key steps in a member’s journey can enable funds to proactively reach out and show up in the moments that matter. For example, if a rollover has not been completed after a certain time period, then the next best course of action might be for an agent to follow up with the member.
The most important part of introducing a human element to a customer experience is to make sure the fund representative has exactly the data they need to assist the customer. No one wants to repeat themselves, wait to be connected to a different department or be delayed while a representative queues up the necessary information. Reducing friction and frustration at this level is particularly important given human interaction is required mostly for transactions that are more emotive.
So while digitising experiences is a priority, customers still want easy access to a real person when they need it. Indeed, 83% of customers expect to engage with someone immediately when contacting a company. And with 52% describing most service interactions as fragmented, here too is another opportunity for gaining the competitive edge in what is set to become an increasingly competitive sector.
How AI can contribute
Artificial intelligence has an important role to play in all three of these areas. It can be used to structure and draw useful insights from data to help personalise information without crossing the line into providing financial advice. AI, for instance, can scan data and highlight patterns reps wouldn’t otherwise recognise. That could be patterns of investment, of complaints or of how customers are using a particular service or app. This then allows funds to anticipate issues for customers before they become problems.
AI can also be used to help bots become more intelligent as they communicate with people, which can free up reps to spend time on more value-add tasks. And finally, AI can help support those staff members when they do get on the phone to a customer by surfacing the right information, suggesting recommendations and helping to guide a service agent through a complex interaction.
For years, customers have become used to feeling like a number when it comes to their super funds. Now is the time for funds to change that by using data to make engagement feel personal and meaningful.