Warning issued on ASIC’s AustralianSuper action

Published on the 10/10/2023 | Written by Billy Loizou

Warning issued on ASIC’s AustralianSuper action

Why identity resolution matters…

News that the Australian Securities and Investments Commission (ASIC) is suing the trustee of Australia’s largest super fund over A$69 million in overcharged fees should be a warning to local data custodians.

ASIC has issued proceedings for AustralianSuper’s failure to consolidate the accounts of more than 90,000 members – costing them nearly $70 million in additional fees.

ASIC is alleging that AustralianSuper failed to have adequate policies and procedures in place to merge duplicate accounts, contrary to the fund’s duty to act in members’ best interests

The mismanagement of customer data resulted in duplication of fees and insurance premiums across accounts which summed to A$69 million. The fund has since pledged to refund affected members for the misconduct.

The incident serves as a stark reminder of how fragmented data can lead to financial losses and damaged customer relationships. It should act as a warning for businesses across APAC.

There are three principles that need to be addressed for good data governance, privacy compliance and for managing data for customer engagement:

1.      Data accuracy and integrity: Brands must properly know their customers by maintaining data that is both comprehensive and accurate. AustralianSuper’s failure to consolidate accounts and manage member data properly was a fundamental failure of this principle. It underscores the critical role of accurate and up-to-date data in decision-making and customer data strategies.

2.      Privacy compliance: ASIC’s lawsuit demonstrates that lapses in privacy compliance can have severe legal and financial consequences for businesses. Brands must ensure they have robust policies and procedures in place to protect customer data and comply with evolving regulations.

3.      A unified customer view: The ability to create a unified view of customer interactions is essential for mitigating similar issues. There are wider benefits of a unified view of customer data such as delivering personalised experiences, enhancing customer retention and optimising marketing efforts. This case highlights the detrimental impact of fragmented data.

The need for identity resolution

While double-dipping customer fees cost the super fund both financially and reputationally, investing in identity resolution software could have saved it a lot of grief.

ID resolution platforms enable brands and organisations to improve controls over customer data, systematically identify customers’ truly unique relationships and almost certainly could have avoided costly mishaps like this.

Best-in-class ID resolution software utilises machine learning (ML).

ML technology means that data matching rates and accuracy improve over time, even when unique identifiers are incomplete, inconsistent or unavailable.

This form of ID resolution uses ‘probabilistic’ data linking, allowing human-like logic to reveal inconsistencies that more rigid matching schemas struggle to identify.

Another feature of good ID resolution software is transparency, providing clear insight into processes that are running and recommendations. This builds greater confidence versus ‘black-box’ processes that don’t show how an answer came about. Enterprise scalability is also important – handling and resolving massive numbers of customer identities quickly and cost-effectively, regardless of database size.

Together, these capabilities are known as a customer data platform (CDP) and this case shines a light on why they are increasingly important.

A CDP, such as Amperity, unifies your online and offline customer data. It takes data from every source inside your organisation and consolidates it, so you can better understand each person behind the data. It also provides confidence knowing customer data is unique and robust enough to target segments more accurately.

In conclusion:

This ‘uh-oh’ moment from AustralianSuper should serve as an ‘ah-ha’ moment for brands across APAC.

It demonstrates the importance of sound data management, privacy compliance and the creation of a unified view of customer data. And, in so doing, the avoidance of costly legal repercussions.

About the Author

Billy Loizou is APAC Area Vice President for customer data platform provider, Amperity. He has worked with some of the world’s most renowned brands to improve customer experience and drive profitability.

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