As financial institutions look to expand in the competitive and complex financial environment, we are seeing a surge in mergers and acquisitions. According to a recent S&P Global Report, so far this year, 94 deals have been announced, compared to 50 over the same period in 2020. Total deal value has also soared year-to-date to $32.04 billion compared to $27.84 billion for all of 2020.
At the same time, the growth in M&A activity is coinciding with digital transformation efforts. This can present many opportunities as financial institutions transition to new corporate entities. By leveraging the power of scalable cloud-based technology as part of their M&A strategy, institutions can more quickly and efficiently integrate complex business models and processes, while saving time, money and resources.
Once merged, these cost-savings can be deployed towards modernizing legacy infrastructure and improving data and analytics maturity, all of which help the combined organization offer a technology-enabled experience for their customers. This is important, as technology and digital capabilities are the key foundations for most institutions, especially post-COVID-19. Technology and both internal and external digital capabilities can have a significant impact on the newly merged institutions, benefiting both employees and customers.
Below are examples of how a cloud-based platform can enable M&A strategies:
- Speed: The agility that a cloud-based platform provides allows acquisitive banks to move fast and allows for efficient merging and integration into larger organizations. Good cloud infrastructure also helps institutions rapidly onboard the banks they acquire and gives them the scale to do it quickly.
- Customization: A cloud-based technology stack offers a robust and highly configurable solution that can be more easily deployed across the newly merged entity in comparison to traditional legacy systems. At the same time, an exceptional technology-enabled experience for bank employees can create more efficient processes and add more value to client relationships.
- Flexibility: A cloud-based technology stack such as the nCino Bank Operating System allows for quick adoption of digital capabilities and flexibility to adapt to evolving customer needs by offering the right combination of high-touch personalized banking expertise and high-tech capabilities.
Whether your institution’s goal is to scale and continue growing, or to become an asset to institutions looking to grow their footprint though an acquisition, cloud-based technology can be a valuable piece of your strategy. To learn more, download nCino’s M&A Strategy Spotlight now.