Australia’s superannuation firms have historically had little appetite to innovate.

Big regulatory barriers to entry and a highly acquisitive nature have meant the local super industry has been somewhat sheltered from the early waves of digital disruption hitting other sectors like banks and retailers.
But the tide is turning.
The big super firms are now finding themselves having to compete on a level outside their traditional stomping ground: in technology.
Changing customer expectations around digital services have opened up avenues for young, technology-centric firms and meant an industry that is heavily reliant on customised, generic off-the-shelf software may find itself struggling to innovate rapidly.
Microservices
Many years ago, IOOF built its core super platform from scratch, written in a mix of Java, Delphi and Clojure and running on a MySQL database.
While this architecture theoretically provided it more flexibility than the COTS offerings most of its peers have opted for, its full potential has not until recently been realised.
Over the last 18 months - spotting the threat of smaller, more nimble players, as well the opportunities presented from third-party offerings like robo advice, on the near horizon - IOOF began rearchitecting its core platform to ensure it was ready for whatever is coming.
IOOF's new microservices architecture chops domain concepts like member and advisor, business rules like fee configuration, and orchestration like member registration into small pieces that, when assembled, perform the overall system function.
It relies on a bunch of REST APIs that integrate with the core register and allow IOOF to “plug and play” whatever features it wants into the platform; previously only IOOF’s website interacted with the core platform through Java messaging. The front end uses ReactJS - the technology favoured by Facebook and Instagram - to provide a consistent user experience across devices.
This architecture gives IOOF the flexibility to not only provide new features and products much more quickly, but jump fast on whatever new opportunities arise, according to CIO Andrew Todd.
There’s now less focus on external integrations, and IOOF can respond faster to change in a way that has a reduced impact on the wider system - isolated components make releases simpler and faults easier to contain.
“We’ve focused on simplifying our service to customers, in this instance through the online experience they have with us, whilst working to provide a more open platform that provides us with choices to build, buy or both,” Todd said.
“This model lets us mix and match technology. We want to choose the right technology to solve the right problem.”
Robo advice is one such example IOOF is eyeing off. The automated solutions that can offer somewhat tailored advice to customers are growing increasingly popular in the financial sector, particular for entry-level advice.
Now that it has the technical ability to easily integrate such technology into its core platform, IOOF is in discussions with a number of third-party robo-advice providers for potential partnership. Whether it will invest in a start-up, acquire one outright, or enter a commercial partnership is yet to be seen.
Todd also sees the new architecture as an enabler for less obvious, but arguably more impactful, offerings like integration with HR platforms.
Plugging into an employer’s Workday or Xero suite would mean a straight flow of a user’s superannuation information from within the HR software to IOOF’s core register - removing a lot of the headache associated with filling out forms and grappling with multiple processes and platforms.
The road hasn’t been an easy one to travel, however - microservices may seem simple but “there is a lot to make it work effectively,” Todd told investors earlier this year.
“You need to be highly proficient when it comes to implementation.”
And while the new approach has “challenged our staff and the more traditional thinking technologists in the group”, Todd firmly believes it is “the way of the future”.
“It’s how you move forward in a digital world. As CIO it’s my role to help prepare the organisation for what might come," he said.
“We’re positioned for uncertainty and change, and we can immunise ourselves against that, or make the most of the opportunities that arise.”