Kicking off April’s Expert Insight section is an interview with Luigi Wewege - the Chief Executive Officer of Vivier - a multinational financial group of companies, providing its services worldwide through representation in jurisdictions across Africa, Asia, Oceania, Europe and South America. Outside of this, Luigi serves as the Non-executive Chairman of Nikau Global - an international trade and development firm based in Australasia. He is also a Partner/Director of Palmetto Global Ventures - a bespoke financial management consultancy firm, headquartered in South Carolina, and serves as an invited member of Boston- based non-profit organisation - The Young Entrepreneur Council. Luigi is also the author of The Digital Banking Revolution book which has recently been published and is available for purchase in audio, kindle and paperback versions through all major online bookstores in over fifty countries. Here he talked to Finance Monthly about the New Zealand banking and finance sector, the future of the industry, and his recently published books.

 

What inspired you to setup your financial services firm?

The Global Credit Crunch had relatively little effect on the New Zealand banking sector. In part, this fortunate stability was a result of the health of the country’s financial market and lending sector, which always faced much sterner regulation and control than many other countries during the economic boom between 2002 and 2007. For such reasons, since the 1990s, New Zealand has been the destination of choice for global investors, who have been well-rewarded for their faith. Particularly, those from countries such as Japan and China, who flocked to place their household savings in this island nation, and have since received interest rates well above their domestic offerings. It became apparent to me in late 2013 that many global investors wanted to enjoy the attractive rates offered from New Zealand, without exposing themselves to exchange rate risk and thus, the idea for Vivier was born.

 

What is it that interests you so much in the banking industry?

 What fascinates me is how the industry is evolving so rapidly, and how over the past fifteen years’ financial service innovations have contributed to a completely new way in which consumers can bank. This is now threatening the status quo of traditional banks and is redefining a banking model which has been in place for generations. These new technological advancements have led to established banks being forced to swiftly increase their pace of digital adoption to stay relevant and stop mass client attrition to these agile financial service start-ups.

 

What core product or service does your company offer?

At Vivier our core focus is being able to offer our private clients high-performing savings accounts without market risk volatility. These savings accounts with rolling notice periods, have interest rates which are fixed for the period, and interest is paid tax-free every quarter.

 

What has been one of your biggest challenges as CEO?

I’d say that one of the major challenges that I’ve been faced with was when the company had to push back our timeline of expansion into Southeast Asia. There were numerous challenges for Vivier, and I consider one of the primary ones was due to online connectivity being very low across much of the region. In addition, many financial consumers there don’t have an awareness about the meaning of ‘boutique financial services,’ so the burden falls on the first movers, like us to explain the benefits to the market.

 

What have you done that has been very effective in helping grow the business?

Hiring multilingual staff has been very effective, because language barriers can often be a challenge with remote offices. Although a company may face certain economic or strategic bumps along the way, always ensure your staff can communicate well in in several other languages. This is because you should never assume all your international clients can speak or write in English. Besides the professionalism of being able to correspond with potential clients in their native language, always remember this great quote from Nelson Mandela; “If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart!”

 

What makes your financial services company culture unique?

I set companywide goals for employees in addition to their position specific ones, which has helped build morale and camaraderie throughout the group. I noticed over a period of time that my employees tended to be more receptive to a goal they were responsible for with others, rather than being held solely accountable. Once this was implemented, it completely transformed my business due to employees becoming much more self-aware, focused and willing to put in the extra hours when needed. This was because they realized that their actions impacted not only their fellow employees, but also the ultimate success of the company.

 

You authored The Digital Banking Revolution book – could you tell us a bit about it? How did the idea about the book come about?

The book focuses on how financial technology companies have recently emerged, and transformed the traditional retail banking industry worldwide through a number of disruptive innovations. The idea about the book initially came about due to my work at Vivier, and witnessing first-hand all these changes. Thus, I decided to write and document my experiences, which cover everything from big data, digital engagement strategies, disruptive technologies, mobile payments, and the ever-changing financial behaviours of consumers.

 

How do you see the future of the industry?  

I envision a future with many more financial service innovations being developed, which will disrupt banking. There is already mobile banking, check imaging, and smartwatches that are ubiquitous now, and these are just a few of the latest financial service innovations assisting people with a variety of ways in which to spend, transfer, and manage their money. The reason for my prediction here is that FinTech companies are doing everything they can to win the hearts and minds of bank customers, trying to convince people to switch accounts from their retail bank to utilizing one of their products or services.

However, it will not be all plain sailing because experts are not sure precisely how much further current technologies can be advanced. This means that for FinTech companies to continue their rapid growth, it will ultimately come down to the reliability of the technology presently being developed, which will directly affect their performance either positively or negatively, and will be a major determining factor on their long-term viability in a highly competitive industry.

Alternatively, as retail banks continue to come to terms with the vital importance of digitizing their services rapidly, they will likely find that when migrating to this digital world it could prove difficult for them. The primary reason for this is due to many of them having decades-old back office legacy technology systems. Although, if these banks want to be relevant players now and beyond, they will need to ensure that they equip themselves with a complete new set of innovative digital solutions. Once this has been implemented, these banks must then continue a program of adapting to the digital era by nurturing their customer experience. This can ultimately be achieved through constantly listening to market demands for convenient, simple-to-use, easy-to-understand banking products and financial services that integrate seamlessly into their customers’ lives.

 

Do you believe that retail banks will be able to survive the digital era?

Despite the varied amount of challenges that retail banks now face, they still possess an inherent competitive advantage over FinTech companies. This derives from banks’ larger customer bases, which provide them with vast amounts of customer and transaction data. Additionally, they have built up valuable know-how in the areas of payments, security, compliance, and financing. These competencies are exceptionally difficult to replicate by any financial start-up firms, and most will invariably be confined to acting as financial intermediaries, and thus banks will continue to have the experience and know-how for transactions carried out between their customers and merchants.

This transactional data should be considered one of the greatest assets of retail banks today, and this will continue for many more years to come. The main reason for this is the information obtained by banks, which allows them to better understand their customers, and consequently to be able to better provide them with value-added services, as well as the ability to offer certain financial services in a variety of new and innovative ways.

Traditional retail banks worldwide will undoubtedly need to leverage opportunities enabled by digital technologies now, because this will be absolutely critical to their future chances of success. The majority of banks have been taken completely by surprise, owing to the rapid emergence of FinTech companies. Banks should now go on the offensive by developing innovative financial technologies of their own to disrupt the financial services industry. This will ensure that retail banks will be back at the forefront of providing people with new innovative solutions, and thus helping them regain market share which they have been steadily losing to FinTech companies throughout this current digital era.

 For more information on Vivier and the financial services they offer, please visit their website: vivier.finance or email them on: info@vivier.finance.