Australian superannuation, at the crossroads, must embrace AI

Elula was founded Elula in 2017 with the aim of building a leading Australian-owned Artificial Intelligence software company working for clients in the financial services industry.

Elula's flagship products, Sticky and Nudge, specialise in customer retention and customer acquisition. Our AI-driven products are changing how superannuation funds and lenders conduct business. 

Australia's superannuation system, which requires compulsory employer contributions to a worker's pension fund, now holds over $4.5 trillion in assets, making it the fourth-largest pension market in the world.

But despite the industry's success in growing the pie since inception in 1992, the superannuation system now finds itself at the crossroads, as the 'Baby Boomer' generation, the demographic cohort born between 1946 and 1964, enter retirement.

This has created problems for the superannuation industry. A growing number of newly retired members (and more recently younger workers) are either withdrawing their accumulated superannuation, switching funds, or establishing Self Managed Superannuation Funds.

The data* speaks for itself. Almost $55 billion in member balances moved between or exited industry and retail superannuation funds in fiscal 2025. That equates to around 1.2 million Australians switching their superannuation accounts in the financial year. And the figures are rising. 

The trend of increased switching indicates that the superannuation industry must view that retention isn't about saving one account: it's about protecting decades of future value. 

A member closing their superannuation account with a fund is patterned and predictable, meaning super funds must explore solutions beyond broad, unfocussed marketing blitzes to retain members. 

What superannuation funds need to understand is that they are no longer competing only on fees and performance, but also on intelligence.

The science behind our AI product Sticky makes retention of superannuation accounts predictive, as we identify at-risk members before they disengage, not after they've rolled out. Withdrawals and closing of super accounts aren't random. 

Elula's Sticky predicts customers that are most likely to churn within the next three-months, ranking the customer base from the stickiest through to least sticky and predicting which customers are going to either move from a superannuation fund or re-finance their home loan with a competitor. 

The other chief glaring issue for superannuation funds is the extremely high number of inactive accounts.

An inactive account represents a member account that has not received any contributions, rollovers or transfers, or made any benefit payments within the last two years and which has not been closed as the member is not contactable.

Again, the data is staggering. 

As of December 2025, one-in-six superannuation accounts, or 16.9% of both retail and industry superannuation accounts, were inactive, translating to over $310 billion in member balances sitting in dormant accounts, a figure that has grown by more than $25 billion since June 2025.

The large number of inactive superannuation accounts indicates a high level of member disengagement. The challenge for retail and industry superannuation funds is to drive consolidation of inactive superannuation accounts and then build inflows.

Sustained member engagement supports asset growth through contributions and retention. 

Larger and more stable funds have greater capacity to deploy capital into long-term investments such as infrastructure, private markets, housing and Australian businesses. Conversely, when members disengage and assets leave the system, that pool of investable capital is reduced.

Elula's Nudge product allows funds to identify members who are most likely to re-activate their contributions. It provides win-back, consolidation and advice uptake opportunities because the super acquisition battle isn't won with louder marketing, but with smarter signals. 

Nudge shifts growth from broad campaigns to precision interventions.

There are many reasons why a member of a superannuation fund will switch to another fund or withdraw their savings, such as: investment performance; the level of fees; the provision of life insurance; transparency, or the lack of it, around investments; and, finally, the quality of customer service.

Whatever the reason, the reality is that members are disengaging from retail and industry funds in growing numbers.

Inactive accounts, compounded with member churn shows that the superannuation industry is struggling with mass disengagement.