Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Despite authorities taking their foot off the environmental, social and governance pedal and recent volatility in equities and bonds, the benefits of Artificial Intelligence and improved investor transparency are just beginning.
Flexibility the key for super funds – SS&C
A recent client note from the big global technology company SS&C says there is a growing need for “flexibility, agility and resiliency” in both technology and operating models. While this might seem, at first glance, an obvious statement, it probably deserves some thought.
The client note, ‘Future Super: The Need to be Flexible’ says that, in looking at the developments in the Australian super industry, the factors are: the ‘flexibility’ to easily update and integrate systems as well as configure products, compliance, processes and member experiences; the ‘agility’ to operate sustainably at or ahead of the speed of members, the marketplace and competitors; and the need for ‘resiliency’ and redundancy in operations, backed by technology that allows flexibility in operating models, are all critical for success.
SS&C says: “The five trends in super identified by the client note all rely on, or contribute to, fund flexibility, including:
- The desire to differentiate and create value will spark a shift to hybrid operating models.
- The big will get bigger, but the benefits of scale will be slow to emerge.
- Artificial Intelligence, automation and data will cement themselves as critical drivers of sustainable growth.
- Innovative technologies will increasingly transform the way funds operate.
- Keeping up with regulatory change will remain superannuation’s number one challenge.”
The note says: “As super funds navigate through a constantly evolving environment, and even
as they face a once in a lifetime event with COVID-19, these five trends are rapidly becoming business-critical issues. Funds that are forward-thinking, flexible and agile will succeed, while risk-averse funds, with insular thinking, are likely to fail.”
– G.B.
