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Bank Merger IT Integration

Bank IT Merger Integration PaperA key component to achieving value from a merger requires the smooth integration of both banks’ IT systems and services.  This task often plunges the responsible executive into uncharted territory.  Confronted by an immediate technical challenge or a pressure to act, banks typically choose one of two questionable paths.  Some, fearing one-time costs and complexity, maintain duplicate technologies, never fully integrating their acquisition’s systems resulting in few synergies.  Others narrowly focus on the promise of synergy gains and improved performance.  Then in their haste to integrate, simply choose one system over another, alienating both customers and employees.

Banks have complex operational structures that become more so when two banks merge.  After a merger there is a need to support an expanded branch network, and overlapping product sets while moving to a consolidated operation   Amid this complexity, it is possible to structure an approach that creates synergies, maintains serve customer service levels and achieves suitable trade-offs among internal parties.

To merge these structures for maximal synergy and minimal customer disruption, it is necessary to transform the IT functions that underpin them.  We have found that this process must include two sets of rational compromises.  First, banks must find the middle ground between a rapid migration that captures synergies quickly and a slow one that smoothes the experience for customers.  Second, the merging banks must simultaneously balance the requirements of disparate interest groups within each company.

Published: 2014

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