It has long been known that superannuation funds need to find ways to better engage their members, particularly younger members for whom retirement is not typically part of their everyday thinking.
One strategy involves making the idea of retirement more tangible so that it is more relevant, compelling and top of mind for members. If a 25 year old member understands that contributing an extra $20 into their super fund each week can result in hundreds of thousands of dollars by age 65, they are likely to have a better appreciation of the important role super plays in making sure they can actually afford to live the life they aspire to in retirement.
To this end, some super funds have been building robust digital engagement strategies to foster greater intimacy with their members. There is a great deal of interesting and relevant content that helps inform and engage an otherwise disengaged audience across the different digital channels of websites, social media and apps.
However, there is still a considerable amount of work to do in engaging members. CoreData’s recent Member Engagement Report found that more than two in five (43.7%) super fund members are disengaged or highly disengaged with their fund. This proportion is higher among Generation Y (52.5%).
The increasing focus on digital intimacy in the next few years means technology will need to move far higher up the agenda of super fund boards. The amount of data will continue to grow, as will the rate at which super funds share data through online networks.
Unfortunately, however, this change also brings about an increased threat of a cyber-attack. In its ‘2015 Threat Report’, the Federal Government’s Australian Cyber Security Centre noted that “the number, type and sophistication of cyber security threats to Australia and Australians are increasing … Organisations could be a target for malicious activities even if they do not think the information held on their networks is valuable, or that their business would be of interest to cyber adversaries.”
It is estimated that the cost of cyber-crime in Australia is around $1 billion annually – however the Government admits this is likely underestimating the true cost, as it does not include the cost to business or Government.
Reinforcing the significance of this threat, CoreData’s recent Digital Intimacy Research found three quarters (75.2%) of Australians prioritise the security and privacy of their data over the convenience of interacting through digital channels.
In short, cyber-attacks represent a significant threat to the superannuation industry. While super funds need to continue building their digital engagement strategies, appropriate systems and processes need to be in place to manage the risks and respond in the case of a cyber-attack.
Otherwise, funds could quickly lose the trust of their members and undo all the good work that has been done in the past five years in building intimacy via digital engagement.