How your financial institution can optimize digital during M&A

Puzzle Piece_M&A
Merger and acquisition (M&A) activity continues to gain traction in the banking and credit union space, and this trend is only predicted to continue throughout the rest of the year and into 2020. M&A enables financial institutions to grow deposits and extend their geographic reaches, while also presenting a valuable opportunity to assess and strengthen their digital strategies before merging what was previously two separate entities.

An institution's digital strategy must be prioritized as a critical aspect of M&A. Digital has become the ultimate litmus test against which customers and members judge their financial services experiences, so this isn't an area that can be taken lightly. If their current financial institutions is offering a clunky or inconvenient digital experience, consumers have demonstrated that they will not hesitate to switch providers.

Carefully consider the choices

There are several options for institutions on how to manage their digital platform during M&A. The acquiring bank or credit union should evaluate both its current digital offerings and those of the institution it's absorbing. Aspects such as platform capabilities, user interface, data insight and what features customers and members prioritize from each should be top considerations.

While the option of maintaining two separate solutions may be tempting, this would great a substantial burden. This approach would leave the institution with two apps to manage, two platforms to test and maintain and more challenges for the contact center. Not to mention a signifiant financial burden.

While consolidating users onto a single new or existing platform generates more work on the front end, it's ultimately a better decision long term. A single platform reduces cost and complexity, while also allowing banks and credit unions to more nimbly implement new features and functionality. Such agility and continuous innovation are crucial for customer and member retention, growth and digital relevance.

Transferring customers and members to a new digital platform is a large undertaking, but it can be done within months if properly executed. Institutions that have an established, agreed upon migration plan from the onset are more likely to avoid delays and unnecessary headache.

Establish best practices

There are several steps that institutions can take to ensure the consolidation process is as smooth as possible.

1. Clearly define the objective.

This seemingly obvious step is often overlooked. An institution must carefully determine the objective of what it hopes to accomplish with its digital platform, for both existing and acquired customers and members. Making this clear will help the conversion teams focus on the end goal and better determine next steps when challenges arise.

2. Determine consumers’ digital priorities.

The acquiring institution should analyze usage data from both digital offerings to effectively pinpoint the features that are most important to its new combined user base. For example, if the previous digital platform provided customers and members with personalized budgeting tools and that feature was widely used, that capability should also be incorporated into the new platform. While mining and leveraging data remains a challenge for many institutions, this step is instrumental; institutions must offer the features that their customers and members desire most, or risk losing those consumers.

3. Designate a core team.

A core team should be established and key roles assigned so that all employees involved are clear on their responsibilities and priorities from the beginning. For example, the call center should be involved early, as they will inevitably receive an influx of calls and requests to manage when the migration occurs. CIOs also play a crucial role in migration, as they must manage the complex transfer of data and terms and conditions.

Institutions that fail to establish strategic plans for their digital offerings before beginning a merger risk added costs, bottlenecks and a poor or interrupted customer and member experience. Those banks and credit unions that clearly define the objective, identify key features and designate the core team will be better positioned to have a more seamless merger for both employees and customers and members. While mergers are often overwhelming, they present a strong opportunity for institutions to enhance their overall digital strategy to better serve customers and members both today and in the future.