How do we address member dissatisfaction in superannuation?

Superannuation funds understand the importance of keeping members happy. Fund executives are constantly talking about member experience”. Some of them even have the phrase in their titles.  

However, recent developments suggest that despite the best intentions of funds, there is work to be done. At the 2023 AFR Super and Wealth Summit, Assistant Treasurer Stephen Jones described the superannuation industry as “slow”, “unresponsive” and “not member-focused”. These comments come in the wake of media reports highlighting lapses in member experience in areas such as the processing of death benefits, claims, and the handling of complaints. The Australian Financial Complaints Authority (AFCA) reports that superannuation related complaints are at their highest levels in recent years (see Table 1 for details).

Funds’ use of data and technology plays a major role here. While neither the entire problem nor the entire solution, addressing some key data, system and associated process issues should result in a significant improvement in overall member experience.

Unhappy Members

Recent press about member satisfaction has been less than positive. AFCA reported a 32% increase in complaints about superannuation in FY2023 in comparison to the previous year. In early November, AFCA published data tallying FY2023 complaints (see Table 2 for details), highlighting the depth and severity of this problem.

Superannuation Complaints Received

Table 1: Superannuation Complaints Received (Source: Australian Financial Complaints Authority)

 

Grievances to AFCA

Table 2: Grievances to AFCA (Source: Australian Financial Complaints Authority)

 

Legal action against wealth management organisations has also contributed to the overall perception of member dissatisfaction. In the last quarter, proceedings against TelstraSuper, HESTA, Mercer, Westpac, AMP, and OnePath have made headlines.

All of this begs the question – why are members dissatisfied? The anxieties and emotions involved in personal finances perhaps offer some explanation. Financial security is, after all, a top concern for Australians. A recent study found that 53% of older Australians are worried about outliving their retirement savings as the economic climate becomes increasingly uncertain. And this anxiety is not limited to retirement-aged Australians. ASIC recently reported that Gen Z are the most financially concerned generation in Australia. Couple this financial anxiety with poor experiences and it is unsurprising that members are upset about perceived failings by their super funds.

And it is not just members who are unhappy. Superannuation funds came under fire at the recent AFR Super and Wealth Summit, where Stephen Jones, “read the riot act to superannuation funds over poor customer service and retirement advice”.

What, then, should funds do to address these issues? Contributing to member dissatisfaction are some common technology problems facing funds, resulting in:

  1. Delays in processing death benefits and claims
  2. Poor complaints management
  3. Lacklustre customer experience

While there are invariably other factors in play, we believe that data and technology have a central role in addressing these issues.

Delays in processing death benefits and claims

Members lodge claims at times of significant loss, injury, or disruption to their lives. Often, this could be avoided if funds had the right systems and processes in place. Funds could make substantial improvement by ensuring they have appropriate software to manage claims and benefit payments, that there is interoperability between relevant parties (e.g. funds, administrators, and insurers), and by implementing robust process analysis.

Management of claims and benefit payments via appropriate software is critical. The core function of this software is managing workflow to process the claim. Wherever possible, the software should enable the automation of steps in the workflow, such as confirming the receipt of a claim with a member. In some cases, giving a member piece of mind is as simple as providing an automatic confirmation of receipt.

Interoperability can be achieved by implementing standardised messaging and data formats between funds, insurers, administrators and other relevant parties. This should both increase the speed and efficiency of processes, while reducing the risk of errors and data issues. This is perhaps more difficult to implement, as it requires collaboration and agreement between a range parties – members, advisers, insurers, funds, and administrators. Nonetheless, this would be an important step towards ultimately automating and streamlining processes.

Finally, employing monitoring tools and data analysis allows funds to continuously evaluate their processes and workflows to pinpoint systemic causes of delays and other issues. Continuous, data-driven improvement of processes should lead to significant improvements in member experience and trust in the fund’s ability to manage their claims efficiently and fairly.

There are, of course, non-technology improvements funds can make too. Communicating. Providing a single and consistent point of contact the entire way through the claims journey would too. As always, a combination of technology and human factors leads to the best outcome.

Poor Complaints Management

Complaints management has been on the Novigi radar for some time – we wrote about it back in 2021. The key takeaways for funds remain the same:

  • Make cultural and organisational changes.
  • Update or implement complaints management systems.
  • Improve complaints analytics.

For more details, find the full article here.

Lacklustre customer experience

Though many love to shake their metaphorical fists at superannuation funds for their lacklustre customer experience (CX), in many ways it has improve considerably over recent years. Funds like Aware Super, ART, UniSuper, and HESTA all have mobile apps with aggregate reviews of greater than 4 stars. Members can generally perform a much greater number of actions through digital channels than was possible even five years ago. Nonetheless, superannuation does still lag other sectors of the economy for maturity of digital experience, and this contributes to negative perception.

As Aware Chief Operating Officer, Jo Brennan, said – technology uplift is necessary “so members [are] able to experience the service they [get] from other parts of their lives”. Indeed, people have experienced extraordinary uplift in digitised and automatised solutions across a range of services in their lives – to some extent, superannuation simply needs to get with the times.

Building world-class member experiences requires skills and expertise that most funds do not have inhouse. There is an open question too as to whether funds should even try to build them. Whether they decide to compete with the Apples and Amazons, or simply make incremental improvements, using specialist partners and digital agencies is a good approach for funds to take.

The superannuation industry faces significant challenges in member satisfaction, highlighted by increasing complaints and criticism over poor service. To address these issues, superannuation funds must focus on improving technological infrastructure for efficient processing of claims and complaints, and enhancing the overall digital experience. Equally important is the need for a more member-centric approach, including effective communication and organisational changes. Balancing technological advancements with a human touch is essential to meet evolving member expectations and rebuild trust in the industry. By addressing these issues, funds can turn a story about member dissatisfaction into one about responsiveness to member feedback and their commitment to providing great member experiences.


Kevin Fernandez is General Manager, Market Strategy and Propositions at Novigi, and is based in the Melbourne office.

 

 

Sophie Bowen-James is an analyst in the Market Strategy and Propositions team at Novigi, and is based in the Sydney office.

 

 

 

For more information about anything you’ve read here, or if you have a more general inquiry, please contact us.

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