Bank Mergers And Technology: How To Realize Cost Efficiency Through Technology Investment
In this Flash Insight, we share our perspectives on the strategic impact of technology in bank mergers.
Key research questions
- How does bank efficiency vary for different size institutions, and why?
- What is the role of technology in bank efficiency and mergers?
- Will the number of bank mergers increase, and how can technology help?
Abstract
Financial institutions have many paths to grow revenues, manage costs, and improve profitability: geographic expansion, product introduction, mergers and acquisitions, and technology transformation. It’s assumed that M&A always leads to greater cost efficiency. But is that always the case, and if so, how is that achieved?
In this Insight, we assess what drives synergies and cost reduction in mergers, and whether, or how much, those synergies are realized. We also share our perspectives on the strategic impact of technology in bank mergers and explore the impact of technology on operating efficiency. We then provide an outlook and offer direction on how financial institutions should to respond to increasing pressures on revenue growth, cost management, and heightened competition.