Future-proof super funds through modern data platforms

Australia's superannuation sector is at a critical juncture. As one of the largest retirement savings systems in the world, the sector managed nearly $4.3 trillion in assets by mid-2025 — representing 145% of Australia's GDP — with projections to exceed $8 trillion by 2035. This growth reflects decades of compulsory contributions and a robust investment environment, but it also brings significant responsibility.

As funds grow, they face rising complexity: more members, more products, more data and heightened scrutiny from regulators and the public. They must balance cost efficiency with the need to deliver better retirement outcomes and superior member experiences. This is the first article in a three-part series examining how data infrastructure is shaping the sector's response to these challenges.

At the heart of this challenge lies data

Every aspect of a fund's operations — from investment decisions and regulatory reporting to fraud detection and member engagement — depends on accurate, accessible and secure data. Yet many funds are hampered by legacy systems and siloed processes that were never designed for today's demands, let alone the massive operational scale expected in the next decade.

Industry consolidation is intensifying this pressure. Over the next several years, the number of funds will shrink dramatically, leaving 20 to 30 mega funds each managing hundreds of billions, if not trillions, of dollars. These organisations will need to operate at a level of sophistication never seen in superannuation. Without a unified approach to data, they risk inefficiency, compliance breaches and reputational harm.

To remain competitive and compliant in this new environment, many funds are exploring Modern Data Platforms (MDPs) — integrated, secure and scalable foundations that unify data across the organisation, creating a single source of truth while enabling faster insights, seamless reporting, advanced analytics and AI-driven member services.

Part 1: The drivers for transformation

The push towards enhanced data infrastructure is not just about technology. It is a powerful set of industry forces reshaping the sector: regulatory expectations, consolidation and scale, evolving member needs and cybersecurity threats.

1. Regulation and oversight are increasing

Regulators are significantly increasing their expectations around data governance and reporting. Funds are now required to provide audit trail-ready, granular data across every aspect of their operations, including investments, member transactions, valuations and risk management. Super funds must demonstrate they can collect, manage and report data accurately and consistently, with clear evidence of control over every stage of the data lifecycle.

They must also demonstrate active oversight of third-party providers, as outsourcing has become a key area of focus. Funds need complete visibility into where their data resides, who has access to it, and how it flows across internal and external systems.

Cybersecurity is another priority. Recent cyber incidents involving compromised member data have highlighted weaknesses in identity management and authentication controls. Regulators now expect funds to adopt stronger security measures, such as multi-factor authentication and real-time threat monitoring, to protect sensitive member information.

Artificial intelligence is also under the microscope. AI is increasingly being used to automate decisions, predict member behaviour and personalise retirement planning. However, without clear governance, these models can introduce bias, lack transparency, or cause unintended harm to members. Regulators expect funds to have explainable, ethical and transparent AI systems^[1] that can withstand scrutiny.

Example:
A super fund launches a tool that uses machine learning to recommend retirement strategies. Without governance, the model draws on incomplete data and produces biased outcomes, disadvantaging some members. In today’s environment, this would trigger both regulatory intervention and reputational damage.

2. Managing unprecedented operational scale

Consolidation is reshaping the industry. As smaller funds merge or exit, larger entities are emerging with millions of members and vast amounts of assets under management. These mega funds face new challenges:

Data quality and data silo issues: Data quality is a common concern for organisations handling large and complex datasets. This is especially true for super funds with multiple mergers. Duplicate data, missing data, relational inconsistency and typographical are common examples of data quality issues. Other sources of data issues can come with data silos, where data is spread across multiple, independent systems (from mergers or administrators) and controlled by different groups within and outside the control of the super fund. The challenges caused by data silos include data inconsistency, difficult data integration, data duplication and multiple data governance models. These problems can undermine user confidence in the data, hinder data-driven decision-making and lead to inaccurate or distorted insights.
Massive data volumes and data complexity: Super funds handle billions of transactions annually that must be processed and stored securely. This involves integrating data from multiple sources, including employers, custodians, administrators and regulators, each using different data structures and formats. The challenge lies in consolidating diverse master and transactional data, such as employee details, salary and super contributions.
Complex reporting requirements: Boards and regulators expect timely access to accurate, relevant and validated information.
Increased operational risk ^[2] : A single system failure can affect millions of members and jeopardise trust.

Legacy systems cannot cope with this level of demand. Many rely on manual reconciliation, siloed third-party reporting and fragmented databases, slowing down operations and introducing error risks.

Example: Following a merger, a fund inherits multiple data systems with conflicting definitions of "opt in” under Putting Members’ Interests First legislation. Without a unified platform, reconciling these inconsistencies becomes a massive operational burden and a potential compliance issue.

3. Changing member expectations

Member demographics are shifting and expectations are rising ^[3] :

A growing proportion of members are approaching retirement driving demand for more complex retirement income products and personalised advice.
Younger members expect seamless, digital-first experiences, from mobile access to real-time updates comparable to those offered by leading banks and fintechs.
Across all age groups, members want transparency and control over their retirement savings, as well as reassurance that their data is protected.

Meeting these expectations, funds need a unified view of each member — something that fragmented legacy systems can struggle to provide. Enhanced data integration can help funds deliver more personalised, secure services that build member confidence.

Example: A member nearing retirement logs into their super portal expecting tailored projections and recommendations. Instead, they must fill in pages of personal information that the fund already holds and receive generic content because the fund’s systems can’t integrate data from multiple platforms. This erodes trust and engagement.

For example, while digital engagement is growing, member priorities differ significantly. Not all members actively engage with their super or use digital services extensively. Research shows a substantial portion of members remain passive, checking their balance infrequently. For these members, investing in sophisticated digital experiences may deliver limited returns. Funds must balance innovation with fee competitiveness, ensuring technology investments align with how their specific membership base actually engages with super.

4. Growing cybersecurity threats

As custodians of trillions of dollars in member assets and sensitive personal data, super funds are prime targets for cyberattacks, data security breaches and leaks of confidential information. Recent incidents ^[4] targeting AustralianSuper, Rest, Hostplus, Insignia and Australian Retirement Trust have highlighted weaknesses in authentication controls and identity management systems, resulting in fraud, financial loss for members, data theft and reputational damage.

Enhanced data infrastructure can strengthens a fund’s cyber resilience by:

centralising sensitive data in secure environments
embedding encryption and access controls throughout the data lifecycle
providing real-time monitoring and alerts for suspicious activity
enabling fast, accurate incident response.

Security as an ongoing commitment

While platform modernisation can improve security, it's not a silver bullet. Cybersecurity requires ongoing investment beyond initial infrastructure upgrades — including staff training, continuous monitoring and regular security audits. Platform consolidation, while offering benefits, can also create single points of failure. Additionally, stronger security measures can sometimes impact user experience, requiring funds to carefully balance protection with accessibility. The reality is that cyber threats continue to evolve, and security must be viewed as an ongoing operational priority rather than a one-time technology fix.

Navigating the transformation landscape

The pressures facing superannuation funds are real and intensifying. Regulatory expectations, operational complexity, member demands and cyber threats are driving many funds to reconsider their data infrastructure.

However, the path forward is not one-size-fits-all. The scale of transformation required depends on a fund's size, member demographics, existing systems and strategic priorities. What's clear is that data will be central to how funds navigate these challenges—whether through wholesale transformation or incremental improvement.

The second article in this series will examine Modern Data Platforms in detail: what they are, how they work, and what funds should consider when evaluating them.