It is not everyday that one finds banks looking to integrate or merge, although it is relatively more frequent in the last 10 years– partly also due to several multinational banks looking to consolidate and the resultant divestment across the world. Interestingly, the typical challenges of such integrations are quite independent of geography, size, scale and segments.

Having helped in over 5 different banking integrations involving 10 entities of varying combinations – large and small, multinational and regional, conventional and Islamic, same geography to multilocation integrations, the learnings and experience that the Cedar team has picked is quite deep. They say that in some customs, you’ve got to take seven steps before tying the knot, and a marriage of banks is not necessarily too different either! Let’s explore these a little closer.


Typically, the profile of the customer segment, the quality of the asset book, and strategic fitment of product portfolio drive valuation. However, the complexity of technology and process framework, diversity of geographic spread, size of the organization including any outsourced function drive the complexity of integration. Increasingly, in contexts where multinational banks are looking to sell their regional portfolio, which sometimes is also a carve-out of a book, there is competitive bidding, and hence the quality of data that drives the accuracy of due diligence tends to be superior.


Confidentiality and sensitivity notwithstanding, the success of any banking integration is directly correlated to the individual & collective ownership of key stakeholders from both banks. Having right leadership team members in the steering committee, and a working committee which includes stakeholders across multiple work-streams is critical for driving successful integration. While the working committee would need to meet at least weekly, it is almost


imperative that the steering board and the leadership team is appraised of the progress at least on a monthly basis. The format, structure, content and constituents of the periodic update should be defined upfront. Adapting to common standards, is key


A successful bid does not necessarily mean access to all information. Regulatory constraints prohibit divulgence of sensitive data, especially that of customers. It therefore becomes almost inevitable, in most situations, to design for a two phased transition. Phase-1, which is the initial run-up to “LD1” or Legal-Day 1, wherein both the entities are declared officially to become one and therefore the customer gets to be owned by the acquiring bank, and the second phase is where the integration gets to be executed and completed after receiving access to customer data. While the banks are in the state of transition, there are 3 key considerations that acquiring banks need to bear in mind:

  • Need to operate under a single brand (of the acquirer)
  • The customers now belong to the acquiring bank, and so do associated liabilities.
  • Employees are part of the acquiring bank

The transition phase is typically used to migrate the IT portfolio and associated process framework to the end-state architecture. Till such time that the technology & related processes are migrated, the acquired bank is technically considered to be providing the acquirer a “service”, for a pre-defined fee.


Typical areas that need to addressed through an integration can be summarized in 8 core streams:

  • Financial: What are the key financial metrics defined for the end-state entity?
  • Customers: How to ensure minimum attrition and that customers are effectively on-boarded?
  • Products: What products need to be retained? What is the end-state product portfolio?
  • Credit: How will end-state credit framework look? What is the overall risk exposure?
  • Process: What is the process framework – at the branch, channel fulfilment and centralized operations? How will the transition be executed?
  • Channels: Which branches and ATMs are retained? How will customers be on-boarded to alternative digital delivery channels – including Internet and Mobile?
  • Organization: How do the structure, grades, titles align in the end-state structure? What are the changes to the compensation structure?
  • Technology: Which systems are to be retained, and which to be migrated? Is the migration a Big-bang or will that be a phased approach, across multiple key systems?Lack of adequate business ownership (via direct or indirect reporting structures) and the disaggregating of P&L responsibilities

If all above questions are answered effectively, the integration design has passed the first litmus test! Its is not just the design, but the aligned execution that helps drive the integration.


Considered to be the single-most sensitive step in the entire program, communication levels graduate through the integration timeframe from being informational and generic initially, to becoming more personal related to specific products, and during the final migration, about the new account and channel access credentials. More importantly, communication need to be customized across segments, and also between those who are “common” customers across both banks and those who are new. Effective use of channels –physical mailers, statement inserts, emails, sms, branch and digital channels and also the use of public and social media for generating the right amount of buzz is key. Approaches of explicit and implicit approvals for seeking customers consent to be on-boarded are also very critical, and need to be aligned with relevant regulatory framework.


The most effective mode to build transparency and consistency of communication is to use a performance measurement system, that helps determine the objectives that are set out to be achieved, and the measures that reflect the status of progress. The Balanced Scorecard was first used, many years ago, in the successful integration of Chase and Chemical bank, and Cedar has adopted this as an effective tool to drive integration across all the mergers that it has successfully managed. The key is to identify key merger areas, determine the links and inter-dependencies, allow for clear identification of responsibilities and well set timelines and targets, and ensuring there is a logical approach to integration, with minimal conflicts.


Before the dust settles on the integration program and everything tends to become ‘Business as Usual’, it is important to note that there is a phase of ‘stabilization’ that needs to yet be monitored to ensure that the value proposition defined as part of the original premise –driven by the new customers and the product portfolio, is protected. Ensuring that the integrated process, credit, operations and technology are ‘smooth’ is key. More importantly, the energy levels and the excitement in the air as experienced by the employees of the merged entity is the best barometer to define success of the integration. And then before you realize, it would just be time to plan for the next acquisition!

Author | V. Ramkumar

For a further conversation on this subject of Cedar View or how we may be able to help please email V. Ramkumar, Senior Partner, Cedar at

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Standard Chartered
Deutsche Bank
Emirates NBD
Dubai Islamic Bank
BNP Paribas
RBL Bank
Royal Bank of Scotland

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