This blog series is a continuation of IQ Group’s insights with digital engagement transformation for today’s Super Funds. Since 2014 it has been tracking digital engagement preparedness for the Top 50 Funds as they meet the demands for digital services from Fund members.
In our first blog of this series we reviewed how A Fund’s digital strategy doesn’t stand alone. Like any other strategy, it needs to be grounded in the Fund’s business strategy and link clearly to Fund objectives. Our second blog took a look at what may stand in your way of building this strategy. Our final blog in the series reviews how a digital identity is the cornerstone for digital strategies.
Solving inefficiency and risk with Digital Identity
A digital strategy that has its roots in the Fund’s business strategy must also imbed the concept of “digital identity”. Digital Identity is the electronic information or data that distinctively characterises an individual, group of individuals or other entities and is one of the cornerstones on which a Fund’s digital strategy will revolve.
Advancement in electronic communication such as SuperStream is a great initiative and addresses elements of this risk while introducing some efficiency. Efficiencies in the superannuation industry are usually welcomed with open arms by the majority of stakeholders, from members and trustees to key service providers as it drives cost down and improves service to members. Rollovers across APRA regulated Funds are now flying through the industry at a rapid pace – well over one million rollovers a year – thanks to the efficiency focus of SuperStream.
Super Funds transferring super from one account to another, setting up new members and updating member details will certify an identity through the ATO using their Super TFN Integrity Check (SuperTICK) service as part of their overarching process. If SuperTICK is unavailable or if the ATO cannot verify the identity, a Fund will request certified copies of the member’s ID in order to mitigate the risk of getting the identity wrong. SuperTICK is important in supporting reliable e-commerce transactions. The ATO has estimated that it will save $50M annually in reducing the cost of POI checks, but it’s not the whole answer.
Payment to members
True efficiencies are only as good as their weakest link but basic electronic checks are not enough either. Online services exist that allow Funds and administrators to prove an individual’s identity electronically. However their footprint in our industry is relatively small; and if utilised, typically still involve manual processes. This may include inputting member details in an online portal that is then run against multiple data lists sourced from various institutions for a potential match. These include public sector and some private institutions (e.g. GreenID). If a match is not found, the paper-based check is the fall back.
Digital Identity could be that stone, but we need to make sure the stone is the right size and shape, understand whether or not Digital Identity is being used efficiently in other domains and how the lessons in those domains can be applied to the Australian superannuation industry. The current application of Digital Identity in industries both locally and overseas offers a good sign post to Funds and trustees considering a future digital strategy.
In other industries, usernames, email addresses and passwords continue to be the most common methods of verifying digital identity but these approaches are also evolving and changing. Existing user profiles established under social media networks can now also be used to verify identity for login to other websites and mobile applications. For example, a number of sites offer registration and/or login using a Facebook profile.
Transformation is possible
The evolution of Digital Identity solutions has started and the Super industry in Australia faces its own dynamic when it comes to effectively harnessing Digital Identity to take their online service delivery to the next level. Members, Employers and even the regulator are now active participants in the end-to-end process of Super member identity creation. While the concept of a member-centric Digital Identity is still embryonic, the services such as SuperTICK and external ID checks present Funds with opportunities to start their Digital Identity journey. Funds that are first- to-market in adopting a digital identity solution will be looking for member and Employer stickiness to match the product loyalty of digital device managers.
Director of Business Development
Ron is the author of the IQ Group Annual Superannuation Industry Digital Engagement Study. This blog was developed with the support of the Structural and Thought Leadership Group at IQ Group.