An ASIC report notes the boom in demand for this asset, saying it heightens the need for “better-quality data” about the size of this sector where estimates range between $1.8 billion and $188 billion.
CPA Australia has weighed into the debate about the cost to oversee the industry, adding its voice to those who argue the fee structure favours the larger funds.
MUFG links with IT giant to reshape super fund admin
Under a memorandum of understanding signed last week, MUFG Pension & Market Services will work with Tata Consultancy Services (TCS) to develop “cutting-edge solutions and product propositions for the sector, while expanding each company’s reach in Australia, New Zealand and other mutually agreed global markets”.
MUFG stakes a claim as the largest administration provider in the almost A$4 trillion Australian superannuation fund market but remains a minor player in the NZ KiwiSaver sector. The group also operates shareholder services under the MUFG Corporate Markets brand that has a larger footprint in New Zealand compared to the fund admin business. Superannuation is a “strategic segment for TCS in Australia and New Zealand”, the IT group’s head of both countries, Vikram Singh, said in a statement.
TCS has been working with large Australian superannuation funds for over a decade “to transform their technology and operations and reduce their cost to serve through our comprehensive portfolio of administration and technology services”, Singh said.
The Tata-owned global technology outfit provides market infrastructure software via its BANCS system to the NZX, which is not affected by the MUFG arrangement.
“We intend to explore joint market and innovation opportunities for both new and existing clients, that leverages each of our individual capabilities,” an MUFG spokesperson said.
As well as BANCS, MUFG will likely tap into the TCS BFSI Platforms software that the company describes as “an end-to-end digital ecosystem” for the pension, insurance and other financial services entities. The TCS tech would form the “cornerstone of this collaboration”, the release notes. But the TCS kit won’t replace the existing MUFG in-house system, which includes the Syncsoft platform Link acquired in 2013 – at least for now.
“Our current IT and technology platforms and projects continue to be our focus and priority, and this partnership will not impact our current initiatives,” the MUFG spokesperson said. “The intent of the partnership is to collaborate on future, joint business opportunities, as well as new innovations and solutions that leverage our combined capabilities to enhance the overall experience of funds and their members.”
The agreement may take some time to implement, however. Both MUFG and TCS “teams are now working together on what a future roadmap looks like”.
Link was snapped up by the Japanese MUFG (short for Mitsubishi UFJ Financial Group) for A$1.2 billion in December 2023 following a tumultuous three-year period where the previously ASX-listed company saw four other takeover offers collapse as well as copping a more than £300 million fine over its part in the failure of the Woodford Equity Income Fund in the UK. The Link influence also extended to Germany, Hong Kong, Ireland and the TCS home country of India.
Part of the enormous Tata multi-industry corporate empire, TCS itself is a massive enterprise listed in its own right on the Indian stock exchange and one of the most profitable IT ventures globally. Boasting more than 607,000 consultants on the payroll, TCS reported US$29 billion of revenue during the 12 months to March 31 last year.
