A vision for super

Research into the superannuation sector has highlighted systemic issues, including the industry's underdeveloped operational infrastructure. Many funds struggle with legacy systems and fragmented processes, particularly in member administration. The 2025 research report, Systemic Impacts of Big Super, produced by Connexus, further points to a growing number of complaints, cybersecurity risks, and compliance failures as key indicators of operational shortcomings.

This article explores the evolution of superannuation, the operational challenges funds face, their impact on members and the financial system, and the solutions that can drive industry transformation.

Cottage industry to financial powerhouse

The superannuation industry has undergone significant transformation over the past few decades, evolving from a niche savings vehicle into a dominant pillar of the financial services. This evolution has been driven by regulatory reforms, market expansion, and shifting member expectations.

Initially, superannuation was a fragmented industry, with smallscale funds operating independently, managing relatively modest sums of money. As the industry matured, funds began consolidating to improve efficiencies and increase investment scale. Today, the largest funds manage billions of dollars and serve millions of members. As of 31 December 2024, the Australian superannuation system held $4.2 trillion in assets under management-making Australia the fifth-largest holder of pension fund assets globally. Superannuation funds are now systemically critical financial institutions.

Growth brings operational challenges

The pace of industry growth, however, has come with its challenges, leaving many funds struggling to comply with increasing regulatory demands, evolving member expectations, outdated systems, and the complexities of consolidation-resulting in inefficiencies in administration, compliance and service delivery.