Seeing the Big Picture: Accenture’s Michael Zwiefler on the Brave New World of Digital
It is a reality of life in the global business community that one all too seldom meets Austrians. But so often, when one does, they leave quite an impression. And so it is with Michael Zwiefler, a Hong-Kong-based Managing Director at Accenture, who oversees the firm’s banking clients in Greater China. Hubbis caught up with him on a call, due to COVID-19 restrictions. Armed with his multi-faceted experience of technology and business in Europe and Asia, he has a great belief that private banks must embrace digital and learn from native digital firms such as Netflix, Google, Amazon and Ant Financial as they strive to become truly digital private banks.
Michael Zwiefler’s background is in digital bank strategy and transformation, and his mission is to help private bank leaders truly embrace the digital proposition. The need, he explains, is not simply to add a few digital bells and whistles to the existing models, but to effect digital transformation from the bottom up.
He arrived at Accenture only in 2019 but is already clearly creating a wake behind him across clients in Asia. He arrived with an impressive record. Over the last 20+ years, Zwiefler had worked with IBM in Europe, China and Singapore, including on a global level as one of IBM's digital bank strategy thought leaders. During his time at IBM, Zwiefler was, amongst other high profile assignments, brought into to help one of IBM’s most important financial services clients, DBS, accelerate and augment the bank’s digital banking transformation, a project that has clearly achieved market-leading results to date.
A key focus of his digital strategy advisory and implementation work at Accenture on behalf of banks aiming to consolidate or build in the region is to transform them into truly digital financial services organisations. He defines a truly digital bank as a data-driven and agile organisation obsessed with customer experience by leveraging business ecosystems and next generation operations for driving profitable growth.
He opens what proves to be a fascinating and detailed discussion by explaining that prior to the global pandemic, private banking in Asia has actually been in a very good place if considered from the perspective of growth in AUM.
“Of course the numbers are for 2019,” he reports, “but if you look at the top 15 global players operating in the APAC region, the total AUM at the last count was about USD1.7 trillion, and if you then add the top regional players from Singapore, Malaysia, Thailand, Australia and other countries, that comes to another USD1.4 trillion, so we can see that the major regionals are clearly in direct competition with the global brands. Then there are some digital entrants, but they are still very small in comparison. In short, the playing field is big, growing and fairly open. With the demographics of the region and the economic impetus, things had been looking very good.”
Asia Pacific’s appeals
Accordingly, Zwiefler says it is little wonder that Asia Pacific has become a key region of focus for many of the private banks and wealth managers. “We cannot, of course, reveal names, but I can tell you that we have had several of the large global players coming to us to help them consider how to enter the regional market or to build further out here, and there focus is also on digital wealth management and how such firms will look in Asia, as well as how to get that up and running quickly. They can, of course, see that the traditional wealth management business model might not work.”
He remarks that some of those parties want to go straight towards China, which is unlikely to work out well, as it is probably the toughest markets of all, with entrenched competitors in the form of names such as Ant Financials, Ping An and other leading operators. “It is not simply that those players are faster,” he says, “but the way they are leveraging artificial intelligence, data science, and other technologies is remarkable. We work with them as well, so we have very good insights. I can say that you would struggle to believe some of the financial models that they have and the investment algorithms that they are using, and the speed with which they really implement those kinds of new ideas, it is truly breath-taking.”
Zwiefler maintains that the global players nowadays have much to learn, and amongst the regional banks, only perhaps one or two names can begin to emulate these advances.
A hybrid world ahead
Zwiefler debunks the theory that digital means there will be no human connection to clients. Digital, he says, is not about being only digital, as the RM will continue to play a crucial role for a good long time to come. “On a more strategic level, the companies that will be successful in Asia-Pacific are the ones that become truly digital in terms of their obsession with customer experience, which is the centrepiece of everything,” he observes. “The digital native companies are obsessed and everyone, even the HNWIs, rather expect the similar type of connections with their wealth managers and their private banks.”
The second key staging point is truly becoming a data-driven company. “Support and advice,” he says, “should be entirely data-driven, enabled by data science and analytics capabilities that are much more predictive as they are backwards-looking.”
The third dimension is to be agile from an organisational kind of mindset, thinking about how firms can co-create with clients. “Even in private banking with existing client segmentation it is nice, but not enough, the personas must be understood and matched. At Accenture, we consider there are four personas, so one needs to understand if they are dealing with a pioneer, sceptic, pragmatist or traditionalist, and then engage with them in that knowledge.”
The next dimension involves business ecosystems, focusing well beyond just the investment advice itself into adjacent or connected areas. “For example, we see more and more banks looking at SMEs holistically, not just the company, but the HNWIs behind them and both of their investment needs as well. They are targeting the RMs to service all these areas.”
The fifth dimension, Zwiefler reports, is what he calls the next-generation operations. “You need almost industrial-scale intelligent, real-time automation in place where nothing has to be done manually.
He concludes these thoughts with the view that those companies that really get those five dimensions right will be in a very good position to take advantage of the opportunities and the potential of Asia-Pacific.
Transformation in action
Zwiefler then offers the story of a corporate-enabled instant messaging app that is to be compliant from the banks’ and regulators’ viewpoints, and that will allow for the types of interaction with clients that they are so used to in their daily lives.
“Accenture has a partnership with a fintech for a solution that will permit such an easy interface and is compliant with audit trails,” he reports. “So the RMs will be able to use their private mobile phones, tablets or their company desktops with a specific app that is able to communicate with any instant messaging solution on the other side, that could be WeChat, WhatsApp, Line, Telegram, Facebook Messenger, you name it. You can even switch between apps, so discussions can be started with a client in one app they use and continued in another if there is an issue, for example, if you can only use a certain messaging app with a VPN in one location or another.”
And the great benefit for the clients is that they can use whatever app they are comfortable with, the only requirement being that there is a simple onboarding procedure with the bank. “The banks will then have the remarkable dialogue between the RMs and the clients from which to mine rich data,” Zwiefler reports. “The banks will suddenly know in real-time exactly what the hot topics of discussion are, and it is a great benefit for both sides.”
He elaborates on this technology, explaining that there is also more sophisticated functionality allowing for financial transactions in a secure way, as well as enhancing the advice and information the RMs can provide on a real-time basis. “We consider secure and intelligent instant messaging as one component of RM augmentation,” he says, “and here the idea is that it is then possible to help your average RMs perform like your very best ones, of whom we know there are usually only a few, maybe 20% maximum for the best banks. So, here is just one small example where a little piece of technology, something that is not even expensive, can change things quite dramatically.” Other examples for RM Augmentation are AI driven solutions that prioritise emails for RMs, and even automatically taking care of administrative and time-consuming tasks. All of this on top of existing IT so that it can be implemented quickly without changes in the legacy technology stack.
The company in question that Accenture is collaborating with is LeapXpert, one of the companies to have emerged from the firm’s fintech programme. Although the HQ is in Hong Kong, the founders are from Israel, each of them with more than 20 years’ experience in the communications industry, having worked for companies such as Cisco and Nokia.
“When I first heard the pitch, I really gave them a hard time, leveraging my background in wealth management but also in microelectronics,” Zwiefler comments. “But I was blown away by it all, and moreover it is scalable and very cost-effective. The RM of the future will be carefully nurtured, they will not be replaced by some algorithm, but will instead by augmented by AI and algorithms, and they, the banks and the end-clients will all benefit tremendously. This is agility in practice, and this type of approach is an example of what is required to really compete in the Asian market.”
He explains that his thesis involves the traditional wealth managers, private banks and retail bank, and how they leverage digital business models and technology in order to improve their business. “My focus is very much on the incumbent players,” he says, “and how they can apply the digital proposition specific for personas within the customer segments for the four different areas, namely control, advice, product and lifestyle.”
He gives an example relating to control. “We have just completed an interesting project with a bank on dynamic pricing, where we looked closely into the lifetime value of the customer in order to micro-segment the customer base and then offer them dynamic pricing. Amazon, for example is changing product prices 2.5 million times a day, as a result of algorithms that compute margin, supply, interest, activity, and so forth. The result in private banking might be that two different customers get different prices for the very same product, or service, or advice, this is dynamic, personal pricing and comes under what we call the control area.”
He adds that the other three categories - advice, product and lifestyle – are approached on a similar basis.
“You do not need to be a virtual bank to achieve these advances,” he reports. “Being a traditional bank that adopts a smart digital proposition can allow them to access the four personas I outlined, to really offer a personalised, intuitive customer experience. To achieve this, very simply, the banks have to exceed the customer experience expectations for each of the personas.”
Mining into the true personas
Zwiefler then returns in more detail to the four personas he had earlier highlighted – the pioneer, sceptic, pragmatist and traditionalist.
The pioneer, he explains briefly, is someone who likes to be at the cutting edge, who really likes to try things out in early stages, and who is both excited and understanding of the feedback needed to help improve the solutions. The pragmatists are those who like to take what is on offer, providing it works. The sceptics require convincing of new solutions and new modes of interaction. And the traditionalists are the hardest to convince to move to digital exchange and solutions.
Zwiefler also explains that for the banks, their value chain starts with discovering, moving from the discovery of the client to engaging them to get them to buy a product or service and then building or enhancing the client relationship. “But what is really relevant are the customer experience expectations, which centres on why the customer should be attracted to engage with any bank,” he elucidates. “Once you have convinced the customer to engage, then the customer wants to be understood, the banks must learn to appreciate the way these clients then want to be interacting with them as their wealth managers and trusted adviser.”
Making engagement relevant
And of course, the banks must then make it easy to interact via all preferred channels relevant to the different personas. “This might be very different for each type of persona,” he observes, “probably face-to-face for the traditionalist, or some kind of AI-based advisory for the pragmatists. Once they have achieved this, the next steps are then to look out for customers, take care of them, alert them to dangers, and later on reward their loyalty, show them they are truly a valued customer.”
He elucidates, noting that the full eight stages are: attract me, know me, be accessible to me, make it easy for me, advise me, look out for me, be fair to me, and reward my loyalty. “And of course,” he says, “each stage means something a bit different to each of the four personas, so it is all about micro-segmentation to truly mine out the potential.”
He refers also to a fairly recent Accenture report based on an extensive survey, in which there is considerable insight into the four personas. “For example,” he reports, “we find that between Mainland China and Hong Kong it is quite remarkable what differences there are between the personas in each location. It is a salutary tale for banks and other providers to understand that each location will have major idiosyncrasies, so nothing they are likely to offer will be easily migrated to other markets.”
A digital magnet for talent
He extends this thought to talent, maintaining that perhaps the biggest challenge the banks face is getting hold of people to, in his words, set the world on fire. Why should really talented people go to an old brand, legacy bank, even if they are trying to transform digitally, when they can join a native digital firm?
“Perhaps one way is to carve out the digital arm from the main operations, to allow the venture to run free, but there are also some banks here in Asia that are winning the battle of transformation throughout the entire organisation,” he observes. “But these very rare cases, where there is a much more visionary leadership and where they are institutionally capable of doing radical things within very large organisations and do not, therefore, choose to carve out the digital evolutionary process.”
Setting the right benchmarks
Zwiefler shifts the discussion to the benchmarks by which the banks need to assess their relevance and their competitive positions. “They need the right benchmarks against the right competitors, but also against the best non-financial companies to determine their respective situation regarding the customer experience,” he says.
The next step is to understand the return on investment on whatever investments the banks might make in winning over the so-called digital customer rather than a traditional customer. “That is seriously tough,” he comments, “and in my view, there are only a few banks who have figured it out. What we do know is that the so-called digital customer has between 7% to maybe 12% higher return on equity versus the traditional customer base because they have an engagement level that is up to 16 times higher than traditional customers. And that, in turn, means data-driven banks then have 16 times more opportunities to learn and build their proposition with the customers.”
The digital roadmap is also essential, to work out from the outset how to plot the way through the maze to truly change the business model.
And the fourth area, the hardest, according to Zwiefler, is to become truly data-driven. “Those banks in this region that achieve a data supply chain strategy and put it into place are those that will succeed, and this, of course, requires mining and managing the internal data as well as enriching it with external data. Once you have the data, it is vital to maintain it, to make it accessible, to virtualise it, normalise it, and then finally also visualise it so that people can really make sense out of that data. If this can be done with flexibility and speed the legacy banks trying to transform are in a much better position.”
He offers the example of some pre-Covid-19 work for an insurance company in Hong Kong to help them target relevant Mainland Chinese customers for life insurance. “As soon as they come into Hong Kong,” he reports, “using location technology, the company can then provide those customers with a very specific offer. “In less than one week we have used a variety of data to identify more than 4 million potential life insurance customers in Mainland China of which about 40,000 crossed the border into HK in the following 2 weeks”. These potential customers where then targeted with a highly specific offer once they crossed the border.”
Zwiefler draws the discussion to a close by noting that his perspective on the evolution of private banking and wealth management in Asia confirms to him, time and again, that the need for well-designed and significant change is no longer a luxury, it is a necessity. “The opportunities are certainly available here as there has been remarkable economic and private wealth expansion in the region for several decades. To complete and to win in the future in this region, the private banks must have a holistic vision of where they are, where they are heading and how they can adapt their DNA to become truly digital banks.”
Zwiefler’s Key Priorities
“I will start with my personal situation as a priority,” he reports, “as I have only lived in Hong Kong for a year thus far, although I had been in China for five and Singapore for four years. So, once this is all over with Covid-19 we must ensure that as a family, we can finally explore Hong Kong in all its facets. Then my focus priority will then be back to my work-time passion of helping clients become truly digital banks and providers. We need to ensure that we can then help clients overcome many challenges on the road to becoming a truly digital bank.”
Are You Ready to Become a Truly Digital Bank?
An interview with Michael Zwiefler during the hiatus wrought by the Covid-19 pandemic is akin to a journey at high speed across the landscape of digital transformation in Asia Pacific. But here we attempt to very briefly summarise some of his key assertions.
Zwiefler starts his review of his actual and potential private banking clients by analysing if they suffer from the one common misconception that he sees so often amongst senior bank executives, namely that a few smart digital tools make them a digital bank.
“They might have some smart apps and chatbots,” he remarks, “and that is positive, but a truly digital bank starts with the mindset, with a clear understanding their benchmarks, of the value of a digital customer over the traditional customer, and a vision of the true impact digital technology can have on the business model.”
Zwiefler states that a truly digital bank is a data-driven and agile organisation that is obsessed with customer experience across business ecosystems and leveraging next-generation operations.
He outlines five essential components. The first is the obsession with customer experience. The second component is the drive to become a data-driven company. This includes tapping into new data sources as well as making unstructured existing data usable in an effective and efficient way.. The third component is the quest to become truly agile. And his fourth premise is that business ecosystems need to be developed and honed far beyond open banking, far beyond having a few APIs.
And in striving to further define the pointers towards becoming a truly digital bank, he added the fifth vital element – they need to think industrial-scale intelligent automation and to attract the best digital talent.
In brief, this all adds up to a sea change in an organisation’s DNA. “The starting point of this new DNA is an agile mindset and practice, the ability to move at speed, to experiment, to fail as well as succeed, and then co-create with your customers. It is, in reality, fundamental business transformation,” he concludes.
Getting Personal with Michael Zwiefler
Michael Zwiefler hails from the glorious and very intimate city of Vienna, Austria. “It was and still is an absolutely wonderful place,” he says, “but for my career and future, I soon saw that I wanted to take a more European level perspective, and then more global. So, when the opportunity came along quite early to move to China, I took it, helping to turn around the business that we have there, and then never looking back.”
He loves Europe, he says, but the energy and drive of Asia are irrepressible and irresistible for him. “Asia has been the right place to be,” he reports. “The momentum is incredible, and the dynamism and demographics remarkable.”
Michael Zwiefler is an executive with more than twenty years of experience in strategy consulting, business development, sales and delivery. His industry background is in financial services, and he has extensive experience in commercial banking as well as capital markets, while in his role as client account leader today, he also covers retail and private banking.
He has also become a thought leader for digital banking transformation. He has worked with many of the world's leading banks and insurance firms in the area of digital re-invention.
For the last ten years, Michael worked across Asia Pacific and Europe, where he has built a strong track record in shaping and implementing leading-edge digital banking strategy and transformation projects. Building new businesses, business development, value creation and competitive deal strategy are other areas where he has developed a unique experience, and many of his ideas in these areas have been implemented globally.
Zwiefler today leads Accenture's banking business in Greater China. In addition to that role, he is the Client Account Leader for HSBC in Asia Pacific with the overall P&L responsibility of Accenture's business with HSBC and its subsidiaries.
He and his team engage with clients across Greater China with a strong focus on digital banking strategy and transformation – to improve the overall business performance of their banking operations. Another focus area is Applied Intelligence, which is the application of Artificial Intelligence for enhancing customer experience, creating insights from dark (unstructured) data and intelligent automation across all business areas of a bank.
His first degree was from TGM Vienna in Computer Sciences & Microelectronics in 1991, where he finished in the top 1% of his class, although this is a commendation on his corporate bio that Zwiefler, very modestly, does not refer to.
Computer science was also the subject of his early work. “I became one of those guys that developed computer systems that controlled everything from elevators to trains,” he recalls, “but that was more than 25 years ago and I soon luckily stumbled into management consultancy, and I knew that was what I really wanted to do, so here I am today.”
In fact, it was more by design than accident that he ended up in high profile roles at IBM and Accenture. He had also finished in the top 3% of his class for his MBA at the UK’s prestigious Henley Management College in 1999, an excellent platform for the stellar career over the two-plus decades that have followed.
Financial services, he explains, was a natural fit for him, allowing him to apply his geekier side with his more MBA-driven and structured side. “Actually,” he recalls, “back in 1999, my dissertation for the MBA was titled ‘Strategy and Structure for Next Generation Retail Banks’.” And that is all about what today has become what today might be called digital transformation, but of course, then very much at the early stages of concept and technology capability.
He is married to his Austrian wife, and the two of them enjoy enchanting times with their four-year-old daughter, a regular visitor, he says to his video conference calls from home. “But luckily we have this great feature where we can blur out the background, allowing only my face to appear on the screen, it really is rather useful in my case,” he explains, jovially.
Spare time in more normalised times is sometimes spent doing ‘krav maga’, which is a self-defence system adopted by the Israeli Army, or the more prosaic pastime of running to keep fit. He also enjoys collecting antique maps and electronics.
“And in my quiet times at home,” he explains, “in recent years I have become really excited by physics and the universe, reading loads of fascinating material. Frankly, it shows me, shows us I might say, some perspective about how important and how unimportant we are in the grand scheme of things.”
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