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The Challenges of Complex Mergers with Head of Multichannel at Raiffeisenbank, Michal Plzak


Digital disruptors try to revolutionise an industry with novel products and new ways of working. This new, innovative competition can severely damage traditional institutions’ grip on the market. But sometimes traditional  institutions recognise what they’re up against and decide to pull out the cheque book –  buying out their disruptive competitors and merging with them. We sat down with Michal Plzak, the Head of Multichannel at Raiffeisenbank to talk about handling complex mergers while still ensuring the ongoing quality of the customer experience.

Michal Plzak | Interview

Michal has been at Raiffeisenbank a.s. for almost 16 years, starting out as a Mortgage Risk Manager before moving into product management in 2006. He’s developed a range of mortgage products, spearheaded the bank’s process management approach, implemented their core banking system, and played a crucial role in their merger with e-Bank.  In 2015, Michal became the Head of Multichannel where he works on the bank’s continuous development of their digital channels, with a particular focus on improving new customer acquisition via the web and the bank’s mobile app.

Tell us about background and where your career has led you?

I come from the business side of things; my background lies in managing mortgage products, but my current domain is digital channels — despite the fact that I have no previous experience in IT. It’s been hard. I’ve had to upskill quite significantly in marketing, data analytics, targeting, personalisation, and more, but I’ve enjoyed the challenge.

My biggest goal has been working out how to effectively market products and services to existing customers and understanding what the correct communications channels should be. I’m only just getting to grips with how interconnected everything is: collecting the data, connecting it, understanding it, then leveraging our insights to communicate better with our customers. 

My favourite project was working on our merger with e-Bank, the first genuine internet bank here in the Czech Republic. It was super interesting seeing how a traditional Austrian bank and this digital bank came together.

How did you migrate customers during the merger?

We had a fair few struggles when adopting a traditional waterfall method so we instead pivoted to a more agile development system. In the end, we decided to move to a decoupled approach with layers of micro-services and open APIs so that we could start leveraging the platform directly. As a result, we were able to start replacing services and migrating customers over much faster. We used a few key tactics:

  1. Clearly define goals – we had to decide what we wanted the end to look like before we began. We came up with the following:
    • To migrate customers without friction.
    • To reduce the time we spent on technical maintenance.
    • To boost sales through internet and mobile banking channels.
    • To focus on building the future of the system: consolidated front-end with better user experience.
  2. Planning – we wanted to appropriately assign resources and make sure we could get all our tasks done as quickly and efficiently as possible.
  3. Maintain parity – we rebuilt 90% of our old system to ensure our customers still had access to all of the functionality they were used to.
  4. Communication – we made sure that throughout the process, we were informing our customers, letting them know that even though a new system was in the works, their experience wouldn’t have to change – they would be able to simply go to the website and log in as usual.
  5. Migrate customers in phases – instead of switching people over all at once, we created batches of customers and let them know when they would be migrated. We performed the migration process overnight for minimal disruption and confirmed successful migration to the customers.
  6. Support – migrating in batches allowed us the time we needed to troubleshoot novel problems that didn’t have existing solutions. We were often working on things that we had never done before. We took a few steps to make support run more smoothly:
    • Our phased approach allowed us to minimize outages through load management. I’m so proud of the work we did — we didn’t experience any long outages which was pretty incredible. 
    • We had to make sure we could anticipate and have responses to customer queries coming in. We created FAQs for common issues and focused a lot on team training and upskilling. We had to spend a fair amount of time redesigning our processes and re-training the team to make sure that we could support the new flows. 

How do you manage risk when enacting such large changes?

There are a few different ways that we manage risk on an ongoing basis:

  1. Team Integrations: Our research and development teams are very well integrated with the wider organisation. This ensures that everyone is aligned along the same goals.
  2. Process and phased rollouts: We try and make changes that won’t affect all our customers at any one time and we also do phased rollouts. This means that if anything goes wrong, we don’t put our entire customer base at risk — this is crucial.
  3. Testing: We only ever do small releases and we have an ongoing feedback loop with incremental changes.
  4. Measure: We wanted to understand the impact of new features on our customers: loyalty, retention, satisfaction, savings, sales, etc. If you’re rolling out a feature that is risky to implement but only have a minimal impact, it’s probably not worth it. 
  5. Stakeholder management: We have digital SPOCs (Single Points of Contact) across customer segments. We test our ideas on different segments and then scale if we receive good feedback. The SPOCs are basically our projects’ sponsors but they also manage all the internal communications — they have digital hubs to help them communicate changes and escalate issues to various different teams.
  6. Transparency: Generally, there is a much bigger pay-off in sharing than not sharing. It sometimes delays things, but usually, you answer a lot of questions and doubts early on that help you accelerate later down the line. We also do things like demo days where engineers present some of the things that they have built. 

Merging traditional institutions with their digital-first counterparts

As traditional institutions work to keep up with the digital revolution, mergers such as the one Michal describes are becoming commonplace. One company has the innovative ideas, the proprietary technology, and the agile ways of working, and another company has the money to buy them out and the reputation to stand the test of time. Goldman Sachs recently acquired United Capital so it could add its FinLive CX digital customer-service platform to it’s offerings, providing an advisor-led tech-enabled platform as an option for customers.

On the surface, a merger may seem like a perfect match but combining two very different corporate structures can be a challenge. Merging companies involves merging core values, culture and customer service philosophies, all of which can cause internal  friction and impact the consumer. When merging traditional institutions with digital disruptors, there are three major factors to consider and plan for:

1. Customers 

If you’re an innovative startup, your customers might have concerns about you merging with a large traditional institution. Perhaps they liked that you were small and independent and they now fear that your innovation is going to be stifled. It’s always worth reaching out to customers when going through a merger. Reassure them that their system is going to stay the same and hopefully get better for them. Outline how this merger gives your company more financial freedom and stability and what that means for them as an individual customer as you are able to be even more innovative than before, not less.

If you’re coming at this from the perspective of a traditional institution, then simply inform your customers that the company you’re merging with has a series of brilliant ideas and will transform your business’s approach to innovation. It shouldn’t be a hard sell, especially not in the financial services world — after all, the sharp rise in the number of global fintechs has demonstrated just how popular financial innovation is becoming.  

2. Technology & Processes

When two companies merge, each with their own internal systems, applications and data, merging technology can cause havoc. It’s crucial to have a plan in place. Both companies need to conduct thorough gap analyses of their current workflows to understand if there’s anything that’s missing or could be improved upon.

When each company has different processes for a particular function, find an unbiased way to work out whose processes are more efficient. Often a smaller organization’s processes are assumed to be inferior and the larger company just foists their processes on the smaller. But remember why you’re merging in the first place: the smaller, newer company may have better, more agile ways of doing things. Simply absorbing them into the bigger organisation will mean you potentially lose some of what made you want to merge with them to begin with! The best answer will likely end up being a mix and match — for instance, you might work out that one company’s payments processing is significantly quicker but that the other company has a far more secure IT infrastructure.

The key is to build out a plan that outlines all the small steps leading up to the main goal – having a fully integrated system, no outages, and no missing data. Once you have a plan in place, work closely with key employees to ensure they understand the plan and can begin slowly working your way through the integration process.

3. Employees

There’s no one-size-fits-all advice for handling employees during a merger — it totally depends on the specific circumstances of the merger. Mergers can cause a lot of confusion and stress for employees but regardless of the complexity and nuances of the merger itself, the one critical component of any merger plan is strong communication from leadership. 

Communicate with your employees as transparently and as quickly as possible. Let them know the lay of the land as soon as you can. Nobody appreciates being left in the dark, and job insecurity can have a drastic effect on people’s mental health (not to mention their performance). As teams are merged and reporting structures change, make sure you’re talking to teams and that your line managers are all on the same page with critical messaging and answers to common questions. In the event that there are layoffs, try to ensure that everybody will not only be given time off to go to interviews, but that they’ll also receive a stellar recommendation from the company.

A corporate merger can be a rising tide that lifts all boats but it’s important to ensure everyone has life jackets, just in case.

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