Banking M&A trends during dynamic times

Today, valuation processes are complicated by factors such as evolving core deposit intangibles (CDI) premiums, corporate real estate (CRE) credit exposure, accumulated other comprehensive income (AOCI) marks, and other nuanced challenges—transforming valuation from a purely analytical exercise into a blend of both art and science. Success now hinges on conducting deeper due diligence across multiple domains, including finance, tax, product portfolio dynamics, operations, risk, and technology. Additionally, it is critical to tailor approaches and deal structuring to suit the distinct needs of more various capital providers and investor groups.

Organizations today face growing challenges as their business and operating models and organizational structure become increasingly divergent, which complicates integration design decisions during mergers or transformations. There is increasing variation in how banks approach dynamic parts of the financial ecosystem such as digital assets, private capital, small business banking, and digital channels. To address these complexities effectively, it is critical to achieve early executive alignment on strategic pillars of the future state enabled by the transaction. By anchoring these decisions to the overarching deal thesis and orchestrating planning across major cross-functional streams, organizations can drive integration toward outcomes for the enterprise.

The regulatory review timelines for large deals continue to evolve and have recently shortened, while capital and liquidity reforms continue to shift and vary geographically. Additionally, there are elevated expectations of rigor throughout the integration process. To address these challenges, it is important for banks to engage stakeholders early, establish realistic expectations for timing, and prepare for various closing scenarios. Proactive pre-close planning for post-close integration is also essential to ensure a seamless transition and accelerate toward successful outcomes.

The involvement of large-scale banking vendors, FinTech partners, and dealer-supported or indirect distribution models leads to more integration dependencies, making coordination and delivery increasingly intricate. To successfully manage these challenges and execute with quality, organizations need to prioritize proactive planning, strategically negotiate around aligned incentives, engage counterparty executives at key stages, and ensure that top-tier “A-Team” resources are committed by other organizations to joint delivery efforts.

Attrition risk is increasing, especially among deposit holders and digital-first customers who can switch providers with ease, even as physical channels continue to be a foundational element of customer engagement. To address these challenges, organizations should focus on developing more compelling value propositions, conducting deep customer impact analyses early in the deal, and equip frontline teams for success. Additionally, early, consistent, and tailored outreach is critical for retaining customers and building lasting relationships to grow top line.

Hybrid environments introduce a diverse range of working styles and experiences, which can highlight the importance of organizational culture and the expectations placed on key employees. Artificial intelligence (AI) is increasingly enabling and impacting employees through the bank as well. To succeed in this dynamic setting, it’s essential to clearly set expectations, communicate frequently and transparently, and regularly check in on the cultural climate throughout the transaction. Incentivizing leaders and positioning ambassadors for positive change has become even more critical to avoid unwanted attrition.

Organizations today face increasing analytical demands, while legacy system data quality can vary and security protocols remain a top priority. Meanwhile, AI can be a major enabler of successful M&A as well as a valuable target asset. To thrive in this data-centric environment, it’s important for banks to plan early for all technology requirements, solidify foundational data infrastructure, involve risk and security teams throughout the process, and strategically frontload and sequence data initiatives around the deal.

Architectural complexity, differing vendor timing requirements, and cross–line-of-business (LOB) platform dependencies can add layers of challenge to integration cutovers. Successfully navigating these factors calls for centrally led conversion planning, early alignment with vendors, and thoughtful customer engagement efforts. Conducting comprehensive preparation and testing events thoroughly continues to be key to achieving quality and building confidence ahead of major transitions.

Managing multiple transactions, including both acquisitions and divestitures, can introduce added complexity to one-time delivery efforts and may contribute to organizational deal fatigue. To address these dynamics, it’s vital to commit to building robust M&A capabilities, practice centrally orchestrated planning for the enterprise, maintain a laser focus on value metrics throughout the process, and incorporate resource and capacity planning into the overall deal playbook. Experienced transactors can realize value of multiple deals more rapidly and compound the intended benefits of each transaction.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

Today, valuation processes are complicated by factors such as evolving core deposit intangibles (CDI) premiums, corporate real estate (CRE) credit exposure, accumulated other comprehensive income (AOCI) marks, and other nuanced challenges—transforming valuation from a purely analytical exercise into a blend of both art and science. Success now hinges on conducting deeper due diligence across multiple domains, including finance, tax, product portfolio dynamics, operations, risk, and technology. Additionally, it is critical to tailor approaches and deal structuring to suit the distinct needs of more various capital providers and investor groups.

Organizations today face growing challenges as their business and operating models and organizational structure become increasingly divergent, which complicates integration design decisions during mergers or transformations. There is increasing variation in how banks approach dynamic parts of the financial ecosystem such as digital assets, private capital, small business banking, and digital channels. To address these complexities effectively, it is critical to achieve early executive alignment on strategic pillars of the future state enabled by the transaction. By anchoring these decisions to the overarching deal thesis and orchestrating planning across major cross-functional streams, organizations can drive integration toward outcomes for the enterprise.

Attrition risk is increasing, especially among deposit holders and digital-first customers who can switch providers with ease, even as physical channels continue to be a foundational element of customer engagement. To address these challenges, organizations should focus on developing more compelling value propositions, conducting deep customer impact analyses early in the deal, and equip frontline teams for success. Additionally, early, consistent, and tailored outreach is critical for retaining customers and building lasting relationships to grow top line.

Managing multiple transactions, including both acquisitions and divestitures, can introduce added complexity to one-time delivery efforts and may contribute to organizational deal fatigue. To address these dynamics, it’s vital to commit to building robust M&A capabilities, practice centrally orchestrated planning for the enterprise, maintain a laser focus on value metrics throughout the process, and incorporate resource and capacity planning into the overall deal playbook. Experienced transactors can realize value of multiple deals more rapidly and compound the intended benefits of each transaction.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

Today, valuation processes are complicated by factors such as evolving core deposit intangibles (CDI) premiums, corporate real estate (CRE) credit exposure, accumulated other comprehensive income (AOCI) marks, and other nuanced challenges—transforming valuation from a purely analytical exercise into a blend of both art and science. Success now hinges on conducting deeper due diligence across multiple domains, including finance, tax, product portfolio dynamics, operations, risk, and technology. Additionally, it is critical to tailor approaches and deal structuring to suit the distinct needs of more various capital providers and investor groups.

Organizations today face growing challenges as their business and operating models and organizational structure become increasingly divergent, which complicates integration design decisions during mergers or transformations. There is increasing variation in how banks approach dynamic parts of the financial ecosystem such as digital assets, private capital, small business banking, and digital channels. To address these complexities effectively, it is critical to achieve early executive alignment on strategic pillars of the future state enabled by the transaction. By anchoring these decisions to the overarching deal thesis and orchestrating planning across major cross-functional streams, organizations can drive integration toward outcomes for the enterprise.

The regulatory review timelines for large deals continue to evolve and have recently shortened, while capital and liquidity reforms continue to shift and vary geographically. Additionally, there are elevated expectations of rigor throughout the integration process. To address these challenges, it is important for banks to engage stakeholders early, establish realistic expectations for timing, and prepare for various closing scenarios. Proactive pre-close planning for post-close integration is also essential to ensure a seamless transition and accelerate toward successful outcomes.

Managing multiple transactions, including both acquisitions and divestitures, can introduce added complexity to one-time delivery efforts and may contribute to organizational deal fatigue. To address these dynamics, it’s vital to commit to building robust M&A capabilities, practice centrally orchestrated planning for the enterprise, maintain a laser focus on value metrics throughout the process, and incorporate resource and capacity planning into the overall deal playbook. Experienced transactors can realize value of multiple deals more rapidly and compound the intended benefits of each transaction.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

Organizations today face growing challenges as their business and operating models and organizational structure become increasingly divergent, which complicates integration design decisions during mergers or transformations. There is increasing variation in how banks approach dynamic parts of the financial ecosystem such as digital assets, private capital, small business banking, and digital channels. To address these complexities effectively, it is critical to achieve early executive alignment on strategic pillars of the future state enabled by the transaction. By anchoring these decisions to the overarching deal thesis and orchestrating planning across major cross-functional streams, organizations can drive integration toward outcomes for the enterprise.

Hybrid environments introduce a diverse range of working styles and experiences, which can highlight the importance of organizational culture and the expectations placed on key employees. Artificial intelligence (AI) is increasingly enabling and impacting employees through the bank as well. To succeed in this dynamic setting, it’s essential to clearly set expectations, communicate frequently and transparently, and regularly check in on the cultural climate throughout the transaction. Incentivizing leaders and positioning ambassadors for positive change has become even more critical to avoid unwanted attrition.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

The regulatory review timelines for large deals continue to evolve and have recently shortened, while capital and liquidity reforms continue to shift and vary geographically. Additionally, there are elevated expectations of rigor throughout the integration process. To address these challenges, it is important for banks to engage stakeholders early, establish realistic expectations for timing, and prepare for various closing scenarios. Proactive pre-close planning for post-close integration is also essential to ensure a seamless transition and accelerate toward successful outcomes.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

The involvement of large-scale banking vendors, FinTech partners, and dealer-supported or indirect distribution models leads to more integration dependencies, making coordination and delivery increasingly intricate. To successfully manage these challenges and execute with quality, organizations need to prioritize proactive planning, strategically negotiate around aligned incentives, engage counterparty executives at key stages, and ensure that top-tier “A-Team” resources are committed by other organizations to joint delivery efforts.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

The involvement of large-scale banking vendors, FinTech partners, and dealer-supported or indirect distribution models leads to more integration dependencies, making coordination and delivery increasingly intricate. To successfully manage these challenges and execute with quality, organizations need to prioritize proactive planning, strategically negotiate around aligned incentives, engage counterparty executives at key stages, and ensure that top-tier “A-Team” resources are committed by other organizations to joint delivery efforts.

Organizations today face increasing analytical demands, while legacy system data quality can vary and security protocols remain a top priority. Meanwhile, AI can be a major enabler of successful M&A as well as a valuable target asset. To thrive in this data-centric environment, it’s important for banks to plan early for all technology requirements, solidify foundational data infrastructure, involve risk and security teams throughout the process, and strategically frontload and sequence data initiatives around the deal.

Architectural complexity, differing vendor timing requirements, and cross–line-of-business (LOB) platform dependencies can add layers of challenge to integration cutovers. Successfully navigating these factors calls for centrally led conversion planning, early alignment with vendors, and thoughtful customer engagement efforts. Conducting comprehensive preparation and testing events thoroughly continues to be key to achieving quality and building confidence ahead of major transitions.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

The involvement of large-scale banking vendors, FinTech partners, and dealer-supported or indirect distribution models leads to more integration dependencies, making coordination and delivery increasingly intricate. To successfully manage these challenges and execute with quality, organizations need to prioritize proactive planning, strategically negotiate around aligned incentives, engage counterparty executives at key stages, and ensure that top-tier “A-Team” resources are committed by other organizations to joint delivery efforts.

Attrition risk is increasing, especially among deposit holders and digital-first customers who can switch providers with ease, even as physical channels continue to be a foundational element of customer engagement. To address these challenges, organizations should focus on developing more compelling value propositions, conducting deep customer impact analyses early in the deal, and equip frontline teams for success. Additionally, early, consistent, and tailored outreach is critical for retaining customers and building lasting relationships to grow top line.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

Attrition risk is increasing, especially among deposit holders and digital-first customers who can switch providers with ease, even as physical channels continue to be a foundational element of customer engagement. To address these challenges, organizations should focus on developing more compelling value propositions, conducting deep customer impact analyses early in the deal, and equip frontline teams for success. Additionally, early, consistent, and tailored outreach is critical for retaining customers and building lasting relationships to grow top line.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.

Organizations today face increasing analytical demands, while legacy system data quality can vary and security protocols remain a top priority. Meanwhile, AI can be a major enabler of successful M&A as well as a valuable target asset. To thrive in this data-centric environment, it’s important for banks to plan early for all technology requirements, solidify foundational data infrastructure, involve risk and security teams throughout the process, and strategically frontload and sequence data initiatives around the deal.

Architectural complexity, differing vendor timing requirements, and cross–line-of-business (LOB) platform dependencies can add layers of challenge to integration cutovers. Successfully navigating these factors calls for centrally led conversion planning, early alignment with vendors, and thoughtful customer engagement efforts. Conducting comprehensive preparation and testing events thoroughly continues to be key to achieving quality and building confidence ahead of major transitions.

Managing multiple transactions, including both acquisitions and divestitures, can introduce added complexity to one-time delivery efforts and may contribute to organizational deal fatigue. To address these dynamics, it’s vital to commit to building robust M&A capabilities, practice centrally orchestrated planning for the enterprise, maintain a laser focus on value metrics throughout the process, and incorporate resource and capacity planning into the overall deal playbook. Experienced transactors can realize value of multiple deals more rapidly and compound the intended benefits of each transaction.

M&A activity in the banking sector involves major value creation opportunities but can entail significant capital investment, extended execution timelines, and elevated delivery risks. To overcome these challenges and maximize success, organizations should still remember the basics while evolving their M&A capabilities: a well-defined strategic rationale, a strong central integration management office (IMO), a bias for speed and action, and continuity from M&A strategy to diligence to delivery. Prioritizing aggressive synergy capture and deploying dedicated, experienced resources further strengthens execution and helps enable the deal objectives to be met efficiently and consistently over time.