Following a 2018 full of upheaval and policy changes taking effect, 2019 looks to be another year of technical and regulatory change for the superannuation industry, of which consumers look set to be a focus.
QMV principal consultant, Wendy Colaço, said the combined effect of member outcomes assessments, consumer data rights, financial product design and distribution obligations, and of course Royal Commission recommendations, would see members prioritised in regulatory and business decisions.
The Australian Prudential Regulation Authority’s (APRA’s) new prudential standard and guidance on strategic planning and member outcomes was one example of this, as were proposed product obligations laws.
Unsurprisingly given the regulatory breaches uncovered by the Royal Commission last year, Colaço also warned that there would be a continued heavy focus on remediation of breaches this year, as the industry sees a “more assertive regulatory posture” following the Commission.
The consultant also suggested that the Royal Commission would lead to greater asymmetric competition in the industry, as disruptive innovators sought to capitalise on opportunities cropping up in supply chains or consumer interfaces, rather than through direct competition.
“New entrants from the tech sector will develop to meet the demands of an emerging demographic, such as new payments platforms plugging holes in a disjointed industry but answering the needs of a community demanding immediate service and nimble products,” Colaço said.
“It is likely we will see a flood of new market entrants looking to capitalise on market opportunities resulting from the reputational impacts of the royal commission through using modern technologies, particularly in the banking, financial planning, and insurance sectors.”