Banks target SuperStream as a transaction banking opportunity

Three of the country's big banks are looking for business opportunities in the superannuation industry's SuperStream initiative, which kicks off next week.

Commonwealth Bank, National Australia Bank and Westpac are among about 40 organisations included on an Australian Taxation Office register of service providers equipped to meet SuperStream requirements.

SuperStream is a move to electronic processing of superannuation transactions, using common data standards and formats. Transactions include contributions and rollovers, and data exchange includes registering new accounts and providing account information.

Currently funds have different formats for accepting contributions.

The aim of the system is to reduce the time it takes to process contributions by standardizing formats and to cut costs by taking the use of cheques and paper-based processing out of the system. The new system is also designed to improve the security and integrity of superannuation payments.

Employers will be able to use a single channel when dealing with super funds, regardless of the number of funds their employees contribute to.

The compliance date for businesses with more than 20 employees is June 30. The ATO, which is administering the scheme, has said it will give companies flexibility until October 31.

The ATO said "many tens of thousands of companies" had already implemented SuperStream.

Companies employing 19 or fewer people are required to start implementing SuperStream on July 1 and have until June 30 next year to meet the requirements.

Employers have several options: they can upgrade their payroll software, or use a clearing house service or super fund portal.

Westpac has been the most aggressive among the banks in pursuing the business opportunity offered by SuperStream. The bank's general manager of global transaction services, Rachel Slade, said the business would be small in the big scheme of things at Westpac but it was highly strategic, offering the prospect of moving into other parts of an employer's business.

Westpac's product is QuickSuper, which offers a data exchange and payment clearing service. It provides access to every registered super fund in Australia, allowing employers to make one contribution payment each period. The employer gets automated reporting of contributions and transaction histories.

Westpac's director of global transaction services, Emma Dobson, said Westpac had a big market share of transactions currently going through SuperStream.

Dobson said: "What we see in some cases is employers with a hundred or so employees making payments to a hundred or so super funds. Under the old process it could take five days to make all those contributions. Now it takes five minutes.

"A large employer with 10,000 employees might have 90 per cent of its staff in a default fund but the ten per cent in other funds is still a large number. For many employers the administrative complexity of the old system was a problem."