From the emergence of digital banking to the increase in mergers and acquisitions (M&As), the financial industry is rapidly evolving. Big banks are getting bigger, fintechs are finding a niche in the market, and smaller regional banks and credit unions are joining forces to scale and remain competitive.
M&As can be exciting as financial institutions have an opportunity to grow and deliver newer, better services to customers. However, they can also be scary for everybody involved — and we don’t mean the CEOs and board members who sign the contracts.
There are two key groups that can easily be overlooked going into M&As: employees and current customers. Without proper communication during M&As, you could be giving customers the excuse they need to seek out competitors and employees a reason to look for other work — both things you don’t want to see happen.
While executive members of the institution make decisions about how merged and acquired banks will operate, employees are often left in the dark. This can lead to rumors circulating throughout your organization, particularly if the bank or credit union is the one being acquired, affecting employee morale and loyalty.
When it comes to your existing or incoming customers, they’ll be concerned about how their accounts will be affected by the transition. Will they lose any services or beneficial interest rates in the merger? How will their digital banking change? Meanwhile, uninformed employees will be unable to provide answers and good service during a transition, further pushing customers away.
Being the only regional bank in town isn’t the competitive advantage it once was, and those customers might be more willing to switch if they’re not being informed about changes. After all, big banks have been riding the digital revolution to a bigger market share over the last decade, making switching more attractive.
It’s important for you to maintain contact with both of these parties during any M&As. Don’t leave your employees or customers twisting in the wind and wondering if they should look at making a change. Following are the keys to keeping everybody informed.
Develop a Communication Plan
An established and comprehensive communication plan is critical to keeping pertinent parties informed during a merger or acquisition. Sending an initial letter followed by a huge packet of information down the road will only lead to an influx of customers calling, emailing, or visiting branches to find out what’s really going on. A multipronged approach will help keep everybody informed and free your existing and merged/acquired employees to do their primary roles during the conversion.
Those involved need to understand what changes are going to take place and when they’ll happen, whether that means a change to online or mobile banking, to a back-end operating system, or to services or benefits that are currently being offered.
Employees at both institutions, but especially the acquired institution, should be trained on the coming changes before customers are notified, so they can better answer customer questions throughout the conversion.
Execute the Communication Plan
Employees should be notified as soon as legally possible so you can start preparing them for the change. An email newsletter can help get this information to them quickly while also providing an easy vehicle for links to documents and other critical details they might need to get educated on changing processes.
Consider connecting with customers across every possible channel. Physical mail is a good starting point, but continued communications through emails and mobile devices will be important. As with all communications, you want your message to go where the eyeballs are, and most people are never far from their smartphones.
Email newsletters are a great way to get information about a merger or acquisition to the pertinent parties quickly and efficiently. They also allow for a level of personalization that lets customers know how important they are to you during this transition.
Be sure you keep everybody informed during M&As, and you’ll be able to retain customers as well as experienced and valuable employees.
