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M&A in Banking:

5 lessons learned for onboarding digital operations


As the banking industry recalibrates and reimagines post-pandemic growth strategies, it is expected that merger and acquisition (M&A) activity will soon begin to increase, representing a dizzying array of opportunities for the Canadian banking sector.

As banks seek out M&A targets in the marketplace, IT and operations executives should ensure they are ready and equipped to successfully onboard a newly acquired company's digital operations, systems, and resources into the bank's IT ecosystem.

To help Canadian banks avoid the pitfalls and improve their success with digital M&A activities, we have compiled five lessons learned in onboarding IT and digital operations, and the pragmatic solutions for each one. Complete the form to download the full report.


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Acquiring digital, data, and other IT capabilities can be a different beast from your conventional M&A finance and operations due diligence assessment. Digital technologies often carry hidden complexities that require a comprehensive and phased approach to meet long-term and immediate short-term needs.

Making assumptions around the technological fit of digital capabilities or underestimating the time it can take to pull together experts (both internal and external) to set up and merge complex IT ecosystems can result in business disruption, as well as loss of time, money, and opportunity.

How can IT prepare for and help accelerate a business merger and acquisition? First, seek input and assistance from capable, specialized, and unbiased experts who can support your pre-and post-merger acquisition needs in the areas that are hard to assess objectively.

When you bring together two or more different cultures, gaining preliminary insights into the acquired company's IT operating model and cultural fit is critical. This will help mitigate mismatched expectations with newly onboarded technical resources that could result in downstream issues, attrition, loss of intellectual knowledge, and poor post-merger performance outcomes.

A measure that is often helpful during the pre-integration stage is conducting an integration readiness assessment. This assessment measures the cultural fit of a target organization into the acquiring organization across several dimensions, including interdependence vs. independence and flexibility vs. stability and control. A more targeted integration plan that considers cultural differences can be created by mapping this out ahead of time.

It is unlikely that each organization—the bank and the acquired entity—will have made all the same investments and taken the same approach concerning technology. Therefore, being prepared to assess and accommodate a wide range of technical considerations and onboarding options will be vital. Having a thorough understanding of each organization's technology ecosystem and the legacy systems to migrate or leave behind will alleviate compatibility issues.

If not addressed in the early stages of the M&A process, you could face integration and governance issues due to differences in technology or resource allocation deficiencies when onboarding a wide range of technical assets, applications, and data. This will result in cycle time delays, lack of employee readiness using the systems, and inevitable disruption.

Common oversights often happen in the areas of protection, privacy, and security. For example, smaller financial services firms may reside lower on the security and privacy maturity curve due to less scrutiny from regulators and reduced ability to invest in enterprise-grade security practices. Inheriting lesser-designed security and privacy policies is a considerable risk. Therefore, it will be incumbent upon the acquiring organization to apply its standards to the incoming organization.

Banks hold the personal information of millions of customers—data that they must keep private so that customers' identities stay as safe and protected as possible, and so that the organization's reputation remains untarnished by preventing breaches.

The key to avoiding an unclear integration path is to develop a plan and identify the digital strategy and critical decisions a bank must make to achieve the desired results (financially, strategically, operationally, and organizationally) by when and in what order.

Establish an integration task force and lay out a decision roadmap made by the right people at the right time with the best available information. This will create a clear vision for how issues will be prioritized and triaged while accelerating the decision-making process.

Complete the form to download the full report and learn more about BDO's approach for successful onboarding of digital operations in banking.

Scoping and timelines

While establishing the scope of the M&A integration, divide the scope areas into buckets that identify services within the scope of integration. Services to be integrated by third parties and services not requiring integration.

The scope of the migration should be divided into a prioritized plan that identifies the services that should migrate early and where dependencies exist. For example, a typical macro plan could look like this:

Pre-close activities

Activities to be completed before closing include:

  • Data and file migration activities
  • Creating cloud-based tenants
  • Changing or merging domains
  • Setting up user accounts for migration
  • Reviewing and assigning contractor agreements
  • Planning business continuity fallbacks
  • Post-close activities
  • Identification and cataloguing of technology assets into a rationalization plan
  • Interim infrastructure support structure including service level agreements (SLAs)
  • User rights management review
  • Information privacy and separation
  • Network infrastructure review and separation
  • Email migration plan
  • App migration, data migration, security, and data separation

Complete the form to download the full report and learn more about BDO's approach for successful onboarding of digital operations in banking.

How can BDO help?

Is post-pandemic M&A activity on the horizon for your financial institution? BDO supports our banking industry clients with digital acquisition, crucial due diligence assessments, integration planning, and IT strategies to onboard and merge valuable digital operations and IT resources of acquired entities. Ancillary benefits often include opportunities for value creation, strengthening IT infrastructure, implementing well-planned hybrid and multi-cloud ecosystems that provide IT agility, strategic flexibility, and competitive advantage across the bank.

Contact our team of BDO advisors early in the process to support you in the following areas:

  • Technology – Strategy, assessment, and planning
  • Risk Advisory – Identifying and mitigating risk
  • Transaction advisory services – M&A, capital advisory, and valuation
  • Management consulting – Strategy, people, program & change management


Mike Gelesz, National Industry Leader, Banking & Financial Services, Consulting

Rishan Lye, Partner, Advisory Services, Technology

Denis Repin, Director, Consulting, Technology Services

Michael Morrow, Partner, National M&A and Capital Markets Leader

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