Many superannuation funds are realising that their existing operating models are not up to capturing and leveraging the data funds needed to make better use of member information, research shows.
MetLife’s research on big data and super, compiled through talking to 10 super funds, showed that high quality data was vital for accurate segmentation, capturing the data remained a challenge for the industry.
“We have never had the right framework in place to make data or evidence-based decisions… I don’t think anyone within Australia is using data particularly well,” one super fund executive said.
The challenge remained even as executives conceded the industry was changing rapidly, with an increase in the amount of account consolidation and switching, as well as the rise of self-managed superannuation funds.
“We are starting to see a shift away from the regulated bunch of rules we build the product around… we just used to push those services out to people. One size fits all? Not anymore,” another fund executive said.
“Super funds are grappling with their own data. It’s like there’s not much data that you can play with, so in terms of the core superannuation data the sophistication is not there yet,” a third executive said.
The research suggested that insurers could help meet the challenge as they were experienced in capturing and analysing customer data to enable segmented customer acquisition and retention strategies.
Funds were looking to the insurance data to drive strategic insights that would bring about better product design, performance management and risk controls.
Funds would like insurance data to explore customer behaviour and macro trends, speed up claims ratios, identify pricing and design problems, and collect data sets across portfolios.
