July 1, 2014

Bank rebranding experience is a competitive advantage during M&A activity

Having completed a bank rebranding project for Centennial Bank recently, I spoke to my contact at the Federal Reserve Bank to learn more about how banks receive approval during M&A activity. I was already somewhat familiar with the key metrics regulators use to gauge competition and the impact the potential acquisition will have on the marketplace. I learned other factors include the readiness of the acquiring bank to integrate the operations of the bank being acquired, including quick turnaround time for bank rebranding.

Obviously my ears perked up when he mentioned bank rebranding speed, since we pride ourselves on completing rebranding projects on time and on budget. For the Centennial Bank rebranding project, our first deadline was two weeks after the deal closed. We provided temporary signage that announced the new brand (Centennial Bank) and replaced the old brand (Millennium Bank) to meet the first bank rebranding deadline. By using low-cost temporary signage initially, we were able to install high-quality permanent signage later.

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Speed of overall integration is a key ingredient to enhancing ROI. According to a Booz & Company report titled, “New Integration Rules: The Path to Successful Bank Mergers,” banks must focus on retaining high-value customers, since they are most likely to leave as they seek low-risk, top-quality institutions. The report states, “They can and will depart at the slightest hint of instability, and they are being aggressively courted by stronger banks.”

Reputation management goes hand-in-hand with strong branding. During merger integration, that means the bank rebranding needs to be done quickly and seamlessly. Bank signs, customer statements, transactional items, marketing materials, and so on – the bank rebranding process needs to ensure the new brand is displayed on all touchpoints soon after the deal is done. Otherwise, if the old brand continues to appear, the acquiring bank could be viewed by high-value customers and regulators as unorganized and inefficient. After all, would you really want to keep your money in a bank that publicly demonstrates it doesn’t pay attention to details when more attractive options come courting?

The same report states, “The most persuasive banks will be those demonstrating capital stability, operational excellence, and an effective, relationship-based sales approach.” From an operational standpoint, bank rebranding should be high on the merger integration priority list. Outsourcing bank rebranding to experts is a way to quickly and effectively rebrand the acquired bank after the deal is closed. Otherwise, regulators and high-value customers may question the acquiring bank’s overall quality and readiness for growth. Not exactly the reputation a bank focused on M&A activity wants.

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