RESEARCH REPORT

In brief

In brief

  • For banks aiming to acquire new digital capabilities to better compete, fluency in digital will be a key distinction in deal execution.
  • Embedded digital innovation, like Applied Intelligence and Intelligent Automation, can make for smarter, faster and cheaper bank acquisitions.
  • Banks can take three key actions now to shift to digital mergers and acquisitions (M&A).


A new wave in banking M&A activity is swelling, propelled by easing regulation, tax reform, declining performance and other industry dynamics. Progressive banks are looking to acquire the right digital capabilities to bolster their competitive positions. They would do one better to also infuse digital into their M&A as an execution engine.

Digital-driven, intelligent M&A for more value

Two smart capabilities can significantly enhance the outcomes of banks’ M&A: Applied Intelligence built on artificial intelligence and advanced analytics, and Intelligent Automation supported by robotic process automation. They pack speed and automation power to yield greater deal synergies and efficiencies. Other digital and IT capabilities that top the list in helping banks make the most of their acquisitions include advanced analytics to improve target screening decision-making; interactive customer experience dashboards for managing any impact on customers; digital HR to enhance workforce integration activities; and microservices and APIs to increase deal execution speed.

Where can banks start?

There are three actions banks can take to begin embedding digital into their deal planning and execution and, by doing so, realize the full value potential of the acquisition, merger or divestiture:

  1. Elevate the role of CTO/CIO in M&A—right from the start.
  2. Add capability to the buy decision. Expanding the footprint alone will not make a difference.
  3. Use new deal execution tools to increase deal speed and reduce costs.

Ride the consolidation wave well

In the digital economy, M&A becomes a strategy not only to thrive but to survive. Banks can succeed by embedding digital into their M&A to better ride the consolidation wave and boost growth, as opposed to falling behind the dynamic market winds and waters.

Banks can succeed by embedding digital into their M&A to better ride the consolidation wave and boost growth.

Banks are adapting their M&A for digital

Leading banks recognize the power of digital innovation to transform business. Bankers we polled in our Tech-Led Change in M&A research are looking to acquire the right digital capabilities, future-proofing their business for the digital economy.

44%

Have a different playbook

50%

Have different valuation and cost models

62%

Have different pre-deal team/evaluation criteria

Banks that embed digital into the way they execute M&A will be able to deliver a better experience to customers and employees, as well as return more value to shareholders. Contact us to see how we can help you.

About the Authors

Tom Herd

Managing Director – Accenture Strategy, Mergers & Acquisitions, North America


Rajat Maaker

Managing Director – Accenture Strategy, Mergers & Acquisitions, Europe​


Peter Sidebottom

Managing Director – Accenture Strategy, Financial Services


Ravi Krishnan Nair

Senior Manager – Banking

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