Superannuation’s Underdeveloped Operational Infrastructure

Elements of superannuation’s operational infrastructure are underdeveloped. That was a key finding of the Conexus Institute’s report into the Systemic impacts of ‘big super’ that struck us as intuitively true. The report cites multiple sources agreeing that “operational infrastructure was a key area of concern”. This is despite the precise causes and nature of the issue being difficult to identify. Indeed, the authors noted that “it was as if everyone who commented thought there were problems but could not put their finger on exactly what they were” and concluded that “greater focus is required on getting to the heart of the issues and identifying the required actions.”

Given our increasingly central position in data and technology in the superannuation sector, we reckon we can have a pretty solid crack at characterising some of the shortcomings of the system’s operational infrastructure. This is the first in a series of articles on the underdeveloped operational infrastructure in superannuation, and what might be done to address it.

Defining operational infrastructure

The Conexus Institute report highlights core information technology (IT) systems, processes and staffing as key components of operational infrastructure. To that list we would add interoperability. The report also singles out member administration and support rather than investments “given that highly sophisticated systems are readily available from external providers to support the investment functions.” While we think this is overly sanguine on investments — despite the availability of sophisticated systems, the investments world is held together by obscure widgets, spreadsheets, and a healthy dose of hope — we too will be focusing on member servicing and administration.

Therefore, for the purposes of this series, we define operational infrastructure as:

The core IT systems, interoperability, processes and staffing that are essential to the provision of superannuation member services and the administration of member accounts.

An overview of the issues

Our aim with this series is to highlight some of the key instances of underdevelopment across a handful of areas. We intend to elaborate on each of the following in a future article:

• Core IT systems
  Superannuation funds and their administrators rely on a relatively small number of core IT systems. These include registries, workflow and case management systems, general ledgers, customer relationship management (CRMs), member online and member apps, marketing systems, reporting, call centre systems and data management platforms (DMPs). The most prominent issue with many of these systems — particularly registries and workflow — is that they are legacy technology, often lacking the features, interoperability, and architectural flexibility of more modern systems. Poor configuration and poor maintenance, for systems like CRMs and DMPs, are another common source of friction. Finally, the complete absence of a key system, or the failure to use it, also contributes to the overall sense that operational infrastructure is underdeveloped.
• Interoperability
  There are several instances of interoperability infrastructure in the superannuation system. Superstream and the associated gateway network are really the poster child, but other examples include Member Account Attribute Service (MAAS) and Member Account Transaction Service (MATS) reporting to the ATO, and the use of payments systems like the Bulk Electronic Clearing System (BECS) and BPAY. What’s notable here is what doesn’t exist. Given the need for superannuation funds to exchange predictable sets of data with administrators, custodians, insurers, investment managers, and a range of technology vendors, more standards and interoperability infrastructure should exist. It’s also worth considering what improvements could be made to existing infrastructure to improve timeliness, data quality, and exception handling.
• Processes
  Processes in superannuation member servicing often exhibit signs of underdevelopment through manual-intensive workflows, inadequate support from appropriate IT systems and lack of documentation. Many processes have evolved organically rather than being strategically designed, leading to inefficiencies, duplication, errors, and delays. Standard operating procedures frequently exist only in fragmented or outdated form, undermining consistent execution and governance. Automation, which could significantly streamline routine operations, remains low, further exacerbating operational risks and inefficiencies. Addressing these process issues would involve a deliberate redesign using best-practice methodologies, increased automation of repetitive tasks, and enhanced governance to ensure continuous improvement and responsiveness to change.
• Staffing
  Staffing challenges manifest clearly through skills gaps, insufficient training, and high dependence on manual workarounds. Many funds and administrators struggle to attract and retain talent with the specialised skills necessary to complement modern operational infrastructure. Over-reliance on institutional knowledge held by a small number of key personnel creates operational vulnerabilities and continuity risks. Resolving staffing issues requires targeted investment in training and upskilling, clearer career pathways within operations teams, and proactive talent acquisition strategies to strengthen organisational resilience.
• Cyber security and financial crime prevention
  Despite heightened regulatory focus, cyber security and financial crime prevention remain areas of substantial operational underdevelopment. Many superannuation funds lack maturity in key areas of cyber security, leaving them vulnerable to sophisticated cyber threats and fraudulent activities. Additionally, fragmented operational infrastructures complicate effective monitoring and timely incident response, exacerbating the impact of security breaches and financial crimes. Comprehensive solutions involve enhancing legacy infrastructure to incorporate modern security practices, strengthening cyber security and anti-financial crime capabilities, implementing real-time monitoring and response frameworks, and embedding a proactive security culture throughout the organisation.

Addressing these infrastructure challenges requires targeted strategies and ongoing commitment. In upcoming articles, we’ll delve deeper into each of these areas — core IT systems, interoperability, processes, staffing, and cyber security and financial crime prevention — to outline actionable steps for improvement. And maybe, just maybe, we’ll play a small role in fostering greater operational maturity, to the benefit of superannuation funds and their members.

Superannuation’s Underdeveloped Operational Infrastructure is part of The Quarterly – Q3 FY25

The production of our quarterly report is led by Novigi’s Market Strategy and Propositions team: 

This article was also strengthened by a wider group of Novigi specialists, whose withering years of toil and rich experience added depth and clarity to the perspectives shared. 

Key Contributors:

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