Published on the 25/07/2013 | Written by Newsdesk
Superannuation funds, life insurance companies and funds managers need to lift their information technology game if they want to fulfil regulatory requirements and forge closer links with clients…
Financial services businesses need to follow the technology lead of Australia’s banks, and invest in more comprehensive information technology systems to better manage their day-to-day operations, ensure compliance with a growing raft of regulations impacting the sector, boost access to client data and provide direct communications links for clients.
A survey of financial services firms released by the Financial Services Council this week revealed that while 80 percent of chief executives believe IT has a major role in innovation and delivering new financial products only 62 percent plan to increase IT spending in the coming year – mostly to extract productivity gains (40 percent) and meet new regulatory demands (26 percent).
Admittedly only one single CEO planned to actually slice IT spending in the coming 12 months, but that still leaves one in three financial sector organisations planning to hold their IT budgets static.
FSA CEO John Brogden acknowledged that the financial services sector had lagged the banking sector in terms of its investment in technology, but said that the advent of regulations such as FoFA (Future of Financial Advice) MySuper and SuperStream would force further investment in technology as organisations strive to achieve compliance.
Whether that leaves much over for technology-based innovation is moot. According to Rhys Octigan, regional head of business development for software and services vendor DST ANZ, which sponsored the survey, financial sector companies need to take a leaf from banks’ book and develop more innovative client facing technology, for example investing in mobile applications to foster closer links with clients, which he said would be particularly important for organisations seeking to expand into Asia.
The report also identified a need for improved data capture and analysis in the sector. Currently, the report noted that, “insurers are pricing products based on a pool of people that they do not have detailed information about beyond general characteristics. Improving the data around group insurance would allow insurers…to better price the risk involved and improve the sustainability of the sector.”
