Mergers and acquisitions saw a slowdown in 2022, amid recessionary fears and concern over increased regulatory scrutiny of would-be dealmakers. But now, notable finalized deals at the start of 2023, improving economic conditions, the need for efficiency for smaller community institutions, and new partnership prospects are providing a better climate for M&A. Even more, with fintechs losing valuation – 60% between Dec ’21 and Aug ’22 – and needed investment capital, the time for fintechs to merge with banks is nigh. In fact, 75% of corporate development experts predict banks will merge or acquire more fintechs over the next two years.
As financial institutions continually prioritize growth, mergers and acquisitions provide new opportunities in new markets, but due diligence ahead of any proposed merger is essential. For banking M&A to be successful, merging companies must consider how to culturally align two merging brands and develop a holistic program that includes branding and naming approaches tied to growth. Further, focusing on a total experience post-merger will help brands deliver on an ideal balance of digital and physical channels for customers and prospects, alike.
Source: McKinsey, “Strategic M&A In US Banking: Creating Value in Uncertain Times,” November, 2022