When should your credit union start planning for M&A activity? Yesterday

For most credit unions, mergers and acquisitions are more than water cooler talk. They’re an everyday topic of conversation. After all, in the first nine months of 2018, an average of 15 credit unions merged per month, according to the National Credit Union Administration.

Whether you are the acquired or acquirer, there are always big personnel – and personal – questions, of course.

Questions like:

  • Will a larger institution absorb your smaller organization?
  • Will your smaller organization merge with another to level up?
  • How will staff blend?
  • Are the business philosophies compatible?
  • How will we manage change?

That’s why you need to think ahead.

Another level of change management for IT

While merging business practices presents a challenge, it often pales when compared to merging technology. IT staff dealing with older, outdated legacy imaging systems with poor taxonomy will face numerous challenges integrating it with a newer or similar system. If one system is still paper-based or a hybrid solution? Add a few more headaches to the mix.

I sometimes think of it as two rally race teams merging. Both come in with a driver, navigator, a team of mechanics and a race-ready vehicle.

How do you get those teams working together? It’s easier to decide who will drive, who will navigate and the mechanics best suited to the job. It’s another to decide which vehicle – technology solution – to race, especially when one might not take the fuel available from the other team.

When credit unions merge, ultimately, you may have two entities coming together within entirely different core line of business applications. To be successful, they need an effective strategy to standardize technology and blend processes.

How do you do that? Once again, you need to plan ahead.

Put together your acquisition strategy – yesterday

Regardless of your credit union’s size, the industry will eventually deliver the gift of M&A to your door. To poise your organization for the transition, it’s best to plan now. Your employees and members will thank you.

As will your new employees and new members.

To get started, I like what Info-Pro Lender Services – a leading provider of real estate tax tracking, flood determination services and property insurance monitoring services – suggests. The organization advises:

  • Creating a strategic plan as early as possible; making sure employee communication and training, client communication and cultural change management are top of mind
  • Ensuring all data is correct and up-to-date in your portfolio, and that there are no real estate tax delinquencies
  • Working with a third-party vendor to ensure a smooth transition with all the complicated components and moving parts

For me, that last one is the most important, especially when we’re talking about core systems and how best to merge and maintain critical processes. There is no better time than now to review your stack and see how you can best prepare technology for the merger process.

How do you manage all that new content?

While you are taking another look at your core, also consider how you might evolve your content management strategy. And the best strategy involves content services as a way to deliver information to users.

The right content services solution will allow you to:

  • Connect information, processes and systems
  • Improve departmental productivity by breaking down information silos, supporting collaboration and streamlining processes
  • Deliver critical content in context – giving employees visibility into the information they need, when they need it
  • Empower users with complete information to make quick and accurate decisions

One way or another, M&A equals growth and evolution. Your core and your content services solutions should work in tandem, growing and evolving with you, so that if – or more likely when – the time comes, technology disruption is minimized, if not eliminated.

* This article was originally published on CUInsight.com.

Steve Comer is the assistant vice president of financial services and insurance sales.
Steve Comer

Steve Comer

Steve Comer is the assistant vice president of financial services and insurance sales.

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