One-Liners to Pay Attention to This Year

• 81% of bankers feel cultural integration is the biggest concern after an M&A deal; in some cases, a Buddy Banker System has proven effective to help merge cultures.
• Common comment: “M&A has the potential to create a weak culture if not managed well.” 

• Post-transaction integration — small glitches don’t get better with time. Fix stuff now.

• 90% of an M&A transaction price is non-negotiable, so the last 10% of expense and/or giveaways are disproportionately important.
• From one astute banker: “In planning your acquisition, assume you’re getting sued. CRA issues and external complaints have become abundant.” 

• Know the difference between omni- and multi-channel
  • Multi-channel: when you switch channels, you start over
  • Omni-channel: when you switch channels, you don’t lose your place
    (35% of FIs mistake omni for multi)
• $350K is the average cost to run a branch annually 

• Know Your Customers: Look for ways to streamline some of the processes and procedures for your top customers while staying in compliance
• Be Aware of Square® — their cash app has:
  
  • 36M active users
  • 7 debit cards
• From Visa® — “we are a working capital company” is part of their new branding 

• Shadow Banks (non-chartered) lead most lending categories (consumer credit and residential)
• 4 banks control 40% of all deposits
• The average person has 3.3 financial services apps
• We are at the lowest tax environment in our lifetime
• $1T is sitting outside the system – sitting on cards like Starbucks® and Panera®
• Fintech solutions to OD:

• We are going through the most drastic tightening cycle in modern history
• Debt-to-GDP 120%
• “Too big to Fail“ is now “Too big to Manage“ — divestiture implications due to current mood in Washington

• “Banks have Cheesecake Factory® menus, we need an In-N-Out Burger® menu.” — Derik Sutton, Autobooks®
• From David Sandler of Piper Sandler: “The greatest exogenous threat is the ability of non-banks to acquire customers on the deposit side.” 
  Exogenous definition — relating to or developing from external factors.
• On Open Banking … “We spent years complying with Gramm-Leach-Bliley Act to lock down data and now they want to open it up for fraudsters to play with.” — Bill Demchak, PNC

• Do less forecasting and more testing.
• Take measured risk; taking no risk does not serve your bank well.

And finally …
My own humble opinion: Make M&A a line item in your board/senior team meetings. You don’t have to be actively looking to buy or sell, but you need to stay current about what opportunities/challenges are currently happening in this arena, and how it might affect you. 

Cheers!
Becki