Challenge Summary Banks have long realized the fastest way to grow is through mergers and acquisitions. These transactions have allowed banks to expand into new markets, increase their customer base and market share, and expand access to products and services, such as credit card and mortgage. However, in the current environment, there is an increased opportunity to acquire banks who may have faltered as a result of negative economic conditions.
Regardless of the objectives behind an M&A transaction, the acquiring bank will be challenged to move quickly and effectively to absorb the acquired institution and avoid losing customers or missing profitability objectives.
Our Perspective ADS has supported clients in hundreds of different M&A transactions. We have found there is no “cookie cutter” approach to achieving a successful merger integration effort. Every transaction is unique and requires a unique approach to achieve success. Even where a bank is an expert at M&A conversions, there is still a need to prepare for the unique details of each transaction.
True success in a transaction lies in properly managing the risk – whether it be customer, market, data, or conversion risk. Based on our experience, we believe the longer an integration project takes to complete, the more risk is involved in the project. Conversely, an integration project cannot be completed overnight. Careful and thorough planning is the key to minimizing the risk associated with any merger integration project.
An acquisition should be viewed as more than just a transaction that increases the institution’s size, scope and market. We believe an M&A transaction can be the catalyst to transform the bank’s business operations and IT functions. This includes the transformation of these functions into more efficient and valuable utilities in such areas as; Application Portfolio Management, Business and IT Processes, Data and Infrastructure Architecture, and Back Office Operations.
Want to learn more? Click here to view the M&A Services Practice Summary
Solution Detail ADS’ M&A Services solutions are designed to provide our clients with everything from a full scale, “soup to nuts” integration and support capability to very focused, unbundled, individual offerings. Our solutions reflect the requirement in today’s dynamic market for banks to be nimble, flexible, and deliver predictable results.
As institutions make and execute on business decisions that are critical to their growth, customer relationships, and profitability, there is little margin for error – that’s why it is so important to have a partner with almost 30 years of M&A experience. We provide a robust, proven, solution set that can help you address any or all of the areas that are critical for a successful integration.
In addition to allowing you to better prepare for an acquisition and execute most effectively, our M&A practice can also ensure important business and IT issues are addressed, and downstream costs are managed appropriately.
M&A Readiness Assessment The M&A readiness process is designed to ensure that an institution is well prepared to effectively undertake and manage an integration event in a defined and standardized fashion. This includes the definition (or update) of an M&A “cookbook” which identifies best practices, the establishment of a functioning PMO and governance function, and a definition/understanding of the roles and responsibilities of the assigned staff. ADS further supports this “state of readiness” through the establishment and/or development of a culture that stresses and values planning, commitment, predictability, teamwork and on-time delivery.
Conversion Execution
An effective conversion execution is the result of three key components: - The M&A “cookbook” developed from the readiness phase has been completed and is being utilized,
- A well-defined project plan and governance function has been established and leveraged, and
- All parties are on-board regarding the M&A methodologies, processes and staffing.
ADS can provide support to assist in development/refinement of these components, leadership as part of a turn-key delivery, subject matter expertise as required to support the project, and the knowledge transfer necessary to keep your management and staff current on the project, processes, and requirements.
Our professionals bring an extensive experience in product and data mapping, customer and employee communications, legal and compliance requirements, operations integration, testing, conversion integration and post-implementation support.
Business and IT Transformation
By utilizing consistent definitions, templates, and standards, ADS delivers solutions that not only improve your M&A capability through the enhancement of quality, productivity and reduced risk, but also enhance your enterprise business and IT functions for better production processing.
Our professionals provide process expertise to transform your business and IT functions to operate at higher levels of efficiency, thus allowing these functions to more quickly and effectively integrate an acquired organization. This efficiency will allow the bank to more quickly recognize the expected benefits of the transaction through lower costs resulting from the efficiencies and economies of scale.
ADS can develop a future state design and implement on that design based on the bank’s requirements and objectives.
IT Cost Management
Some banks look to extend the benefits of IT transformation included in their M&A model into a broader based Sourcing Strategy that includes alternative services delivery models, such as outsourcing and off shore support.
ADS, along with our valued partners, can assist you with every step of the process, including the development of a sourcing strategy, and building models and sourcing practices that align with your architecture. While this may not readily comes to mind when you think M&A, addressing this as part of an integration effort can have the direct positive impact of improving your M&A project while also making other areas, resources, and systems more effective and cost-efficient.
What Can ADS Do For You? Keeping in mind the adage that, “A good conversion is a non-event; a bad conversion lasts forever,” ADS will work with you to define and build-out your M&A strategy to accomplish the following objectives:
- Build a plan that works the first time and can be repeated in future M&A transactions with modifications for the unique circumstances each M&A transaction presents
- Support your “M&A lifestyle” and associated requirements:
- Governance & Project Management
- Subject Matter Expertise
- Turnkey Solutions
- Process Engineering
- Change Management
- Drive the M&A conversion/integration project
- Help you to best leverage your M&A investment
Want to learn more? Click here to view the M&A Services Practice Summary
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