Even with disruptive fintech providers looking to work in the superannuation space, the majority of activity across the sector has not shown proof of improving the net return position of funds, or enhancing benefits to members, according to Bravura Solutions.
A whitepaper released this week by technology and platform provider Bravura Solutions has said the crux of the conjunction between fintech and super industry is the low impact it has had, despite ample opportunities to provide automated services in the superannuation value chain.
“The complex nature of the Australian superannuation industry has served to dampen fintech interest in the sector,” said Bravura director, product strategy and management, Darren Stevens.
“The super industry is already quite fragmented, with many mouths to feed. Combined with recent downward pressure on fees, this has resulted in margins that are relatively modest when compared with other industries.”
The whitepaper said the most serious disruption to super funds had occurred in the distribution and asset management spaces of the super value chain, and that robo and hybrid solutions had also seen some traction in advice and education following downward pressure on funds since the introduction of MySuper.
“Traditionally delivered by in-house advisors, financial planners and accountants, this space is increasingly being facilitated by robo and hybrid advice solutions,” Stevens said.
“Due to recent regulatory changes, the fees for advice – which can vary significantly depending on the type – are now highly transparent to the end customer.”
The whitepaper said that despite the appeal of technology, little true holistic disruption had been felt within the Australian superannuation market and that by “simply taking margin away from existing participants in an already crowded space,” there was no genuine added value for fintechs in super.
“So far, the majority of fintech activity in superannuation has shown little evidence of improving the net return position of the funds or enhancing benefits to members,” the whitepaper said.
“Contrary to the hype, fintech players in the Australian superannuation industry have been neither the harbingers of doom nor the panacea for the industry’s ills that some anticipated.”