While it’s true that mergers and acquisitions can create huge benefits for financial firms, they often take a toll on customer experience. Loyal customers may not appreciate changes to familiar products and services; some will be on the lookout for instances of poor customer service from the moment the M&A is announced. In the worst-case scenario, they may even take their custom elsewhere. 

That could effectively undermine all the benefits the M&A was supposed to deliver, and ultimately lead to its failure. Indeed, as Janelle Estes, chief insights officer at UserTesting, makes clear: “The value of most acquisitions lies in the customer, which means customer experience should be the business priority with any M&A.”

So how can financial firms avoid this outcome and ensure CX remains exemplary during M&A activity?

First and foremost, they should ensure that the customer feels like business will continue as usual. “Providing the same level of service, accessibility to the business, and ongoing communication is key,” says Estes. “The company needs to ensure that the customer understands the merit of the M&A to them and how it will bring greater value, and more choices in products and services. Maintaining this will grow customer trust with the brand and minimise any concerns the customer might have with the change.”

Communication with customers should be as open and honest as possible too. “If it’s no change and business-as-usual then be up front and don’t oversell the benefits; prepare a plan and get your reassurance messages across before and after. It’s a big deal for your business, but may barely register with your customers,” says Lorna Glynn, managing director at Paragon Customer Communications. 

She adds that banks should also aim to use different channels appropriately; a letter delivers a really important message far better than an email, for example. “Even if you have a digital preference, doing this shows investment in the customer experience. If you need a customer to take actions, signpost it using SMS for the immediacy it delivers, or personalise their next website or portal visit to help get the point across. You can also use mandatory regulated comms to communicate more than just the bare minimum. Design them to achieve your objectives and highlight benefits.” 

Banks shouldn’t assume that their customers will be as enamoured with a merger or acquisition as they are. “A common issue arising for banks during the M&A process is a failure to sufficiently plan for the transition ahead, whilst moving too quickly and expecting customers to immediately embrace the changes they have implemented,” Henrik Rosvall, CEO & co-founder of Dreams, provider of engagement banking solutions, says. “It’s very much like walking into your friend's living room and changing their furniture arrangement. Your customers aren't going to take it well if you suddenly alter their experience without clear communication and feedback processes.”

Too much focus on the financial returns and bottom-line impact of an M&A can also lead to customer experience being overlooked. “The customer experience needs to be an integral element from the very start,” says Sameer Pethe, a partner at Kearney. “Focus is typically put on the cost and efficiency which only lead to tangible outcomes in the near term, when CX often brings upsides that can only be visible much further out in the future.”

Thankfully, the right technologies can help banks to achieve a seamless customer service experience during an M&A. “Customer communication management (CCM) platforms are really helpful during mergers and acquisitions,” says Glynn. “They consolidate data sources to centralise the management of customer interactions and give financial organisations total control of brand, content and compliance.”

Merging technologies after an acquisition is considered to be one of the biggest challenges for the post-deal M&A teams. The complexities and time required for system integration is most of the time underestimated. Integrating disparate data centres, applications, servers and desktops/interfaces are known as key contributors to the issues. They all affect the customer journey and experience

Silvia Mensdorff-Pouilly, head of banking and payments, Europe, at FIS, also emphasises the role that technology can play in maintaining an open, two-way dialogue with customers during an M&A: “Investment in a good front end application ensures this can be achieved digitally – via a digital wallet or app. The bank can create connectivity at the back end, while presenting a seamless experience to the customer at the front.”

Even though technology can undoubtedly help banks to navigate CX issues during the M&A process, it can also be the source of issues that can have a serious impact on customer satisfaction. 

“Merging technologies after an acquisition is considered to be one of the biggest challenges for the post-deal M&A teams,” says Dr Joerg Ruetschi, a value-creation, transformational technology and turnaround specialist and author of Transforming Financial Institutions. “The complexities and time required for system integration is most of the time underestimated. Integrating disparate data centres, applications, servers and desktops/interfaces are known as key contributors to the issues. They all affect the customer journey and experience.”

To avoid negative outcomes, he recommends that the corporate development teams on both sides of the M&A come together to ensure there is synergy between their technologies. “Each side must write their own application programming interfaces (API) and code to talk to each other’s servers, share data and map fields in order to accomplish back-end integration,” he adds.

Ultimately, the compatibility between the two companies involved in the M&A process – and not just in terms of their IT architecture – is likely to determine how well they handle CX. “Both companies should be aligned in terms of their values, and banks should also prioritise modern technical platforms that focus on CX when choosing potential acquisition candidates,” says Rosvall. “The more compatible both companies are, in terms of values, skillset and approach, the more likely their customers will enjoy a seamless experience throughout the transition process.”

If handled correctly, M&A should be the driver of improved CX for customers of both firms. “M&A deals can offer a significant opportunity for banks to leverage the necessary assets, resources and expertise required to deepen customer engagement and improve the overall customer experience,” says Rosvall. “However, it’s vital that banks implement a customer-first approach, and communicate with their customers throughout the M&A process, or else they may go banking elsewhere.”

The phrase ‘digital transformation’ has been ubiquitous in banking for at least half a decade.

Research by Cornerstone’s Advisors found that since 2018, three-quarters of US-based financial institutions or credit unions have embarked on a digitisation project. None of the respondents considered their journey to be complete.

This has created an imperative for banks to find, and retain, the best IT and tech teams. Simultaneously, the rise of challenger banks and fintechs has created a fiercely competitive talent market.

According to a 2021 survey by Banking Circle, 99% of banking and fintech CTOs and CIOs across Europe report a digital skills gap in their organisations.

“The acceleration of digitalisation, largely due to the pandemic, has in many ways led to businesses in the banking sector becoming hubs for innovative technologies,” says Matt Collingwood, managing director of VIQU Recruitment, a specialist IT talent agency with expertise in the financial sector. “This rise in demand is good news for talent – more opportunities to expand their skills and experience in whichever sectors they desire.”

And the talent is taking these opportunities. A global survey of employees by EY found that workers in finance and tech are the most likely to move jobs in the great resignation.

This can be attributed to tech workers looking to work on engaging projects. European challenger bank N26 has opened two tech hubs in Vienna and Barcelona but is also allowing its engineers and developers to live and work remotely. The quality of the work, and commitment to innovation is the key point of attraction.

“Banks can spark an interest in talent by constantly looking to innovate. It’s fundamentally changing the traditional epithets associated with banking and creating something new that tech talent are excited by breaking the status quo,” says Chris Hunter, global head of talent acquisition & employer branding at N26.

The acceleration of digitalisation, largely due to the pandemic, has in many ways led to businesses in the banking sector becoming hubs for innovative technologies

Collingwood agrees, and reports that while some banks still run on “dated tech,” many established players have departments exploring innovative technologies. Instead, it’s the risk averse attitudes and pressurised environments that creates stress for talent.

Filling these roles is business critical for these institutions. Keeping customer funds safe by building effective cybersecurity requires a large amount of human resource, much of which doesn’t currently exist in the market.

Spanish bank BBVA recently launched a free massive online open course based on the cybersecurity training given to its 60,000 employees to the general public. “Training for employees and society as a whole is a great lever for attracting talent, and we want to make all the opportunities that the bank offers visible and widespread,” says Alberto González, head of training at BBVA.

This commitment to learning will be crucial for banks’ ability to succeed in the future. As the technology used to protect and service customers changes, so too will the jobs powering them. Reskilling employees at risk of redundancy will become increasingly necessary.

Similarly, upskilling customer service teams to engage with customers in this new setting will be essential for banks to deliver excellent service to the modern consumer.

“I cannot stress enough the importance of utilising the talent an organisation already has. Not only does it decrease the cost of new hires and redundancies, it creates a positive reputation in the market,” says Collingwood.

The pandemic proved a tipping point for online financial services. Customers who had avoided digital banking up to then were forced to engage with banking apps and websites for the first time. At the same time, those who had already engaged dived deeper into a world of self-serve and customer empowerment.

The challenge this sets for traditional banks, insurers and other financial institutions is in rising expectations. The acceleration of digital discovery means customers increasingly demand a connected and seamless experience.

That’s true on websites and apps, and also when interacting with chat services and contact centres.

Customers also expect to be able to find the information they need without delay. Good digital experiences optimise speed and convenience.

Consumers are used to personalised search experiences on Netflix, Spotify and Facebook. They don’t see why they can’t get the same level of service from banks and other financial organisations. Providing that kind of experience is more difficult in organisations that were originally built for the analogue era.

But traditional institutions can’t rely on customer patience in this regard any longer. Challenger banks are changing the game by prioritising seamless digital experiences. If a customer can’t find the information they need easily on your website, they know that alternatives are available.

The good news is that many banks will have plenty of relevant, persuasive content that answers customer queries and nudges them in the direction of new products and services. The challenge is getting that great content front and centre with the right customers at the right time.

With technology like Coveo’s AI-driven intelligent search and omnichannel analytics, banks can integrate technology into their existing systems to create a better customer service offering.

When a customer searches for information on a website, the Coveo Relevance Platform makes sure they get the most relevant and tailored results.

It does so by using all the valuable data thrown up by the digital world. It takes into account the search terms used, and the search terms used by thousands of other customers who were looking for similar information.

It looks at data from a customer’s previous interactions across the organisation. By doing so, it gives a unified view of customer intention and matches it with the most relevant content in a library.

Coveo does all this in the most secure way, meeting all relevant security certifications and giving organisations control over the types of data the service can use.

This is a powerful proposition for banking customers, who all have individual needs and challenges. Delivering search results rife with personalised content tailored to their preferences and goals means finding the right answer, quicker. It answers their questions, and also provides cross selling opportunities by offering appropriate suggestions and recommendations.

But one of the main challenges banks have is that they may have legacy technology or an infrastructure that has grown through M&A. Coveo’s out-of-the-box AI sits on top of these systems and draws in even siloed data and information. It learns as it serves, analysing each customer interaction as part of a process of continual refinement. It recognises the authentic voice of customers, returning accurate search results from vague or even misspelt enquiries. It also extends across communications channels, powering more satisfying chatbot experiences and self-serve journeys.

For customers, the impact is clear. Not only is their online journey simpler, but they will also have a richer experience when calling a company’s contact centre because the tech can arm agents with in-app information on customers in real time.

That’s great for both customer experience and employee satisfaction. Customer service representatives (CSRs) want to help customers with their queries. They don’t want to get bogged down in needle-in-a-haystack searches as customers wait on hold.

Intelligent search allows CSRs to be more helpful, more of the time.

Happier CSRs lead to happier customers. Banks and other financial institutions need to meet rising expectations across the digital journey. Coveo’s intelligent search creates more satisfying customer experiences.

Artificial intelligence is one of the most powerful tools available to customer experience teams. When used effectively, it can help them to process and analyse vast amounts of data to unlock new insights into the customer experience, and deliver automated, highly targeted messaging. It can also dramatically improve the way that customers interact with the firm on a day-to-day basis, providing them with accurate, real-time responses to their queries. 

But to reach this point, financial firms first need to integrate AI tools into their existing CX setup – and that’s not always easy.

Data is the fuel for any AI tool. But legacy systems and fragmented data structures, together with poor data governance in general, mean it is often locked away in silos rather than powering innovative approaches to CX. Indeed, as Ash Finnegan, digital transformation officer at Conga, says: “Artificial intelligence is not a silver bullet; it is only as good as the data provided.”

On top of ensuring they have good data that can fuel creative uses of AI for CX, banks also need to integrate new applications into complicated – and often outdated – technology architectures. 

For example, Hans Tesselaar, executive director at BIAN, says that a lack of industry standards means that banks are often restricted to working with partners based on their proprietary language and the way they operate alongside their existing ecosystem. This “limits the organisation's ability to integrate new best-of-breed services into their CX capability, impacting overall customer satisfaction.”

BIAN’s Coreless Banking platform is designed to help banks to address this challenge by translating each proprietary message into one standard message model. “This enhances communication between financial services and technology vendors and ensures each solution can seamlessly connect and exchange data,” says Tesselaar.

To minimise investment and risks of business disruption, many banks prefer modernising their core banking applications by incorporating a ‘middle layer’ of intelligent functional applications, says Nanda Kumar, CEO at SunTec. “In this approach, customer data and business rules remain untouched, while applications in the middle layer incorporate AI/ML algorithms,” he adds.

But regardless of how they approach technology integration, financial firms need to have a clear idea of how AI will impact their CX function.

“For example, shifting to chatbots versus having people call into a contact centre are two very different customer experiences,” says Janelle Estes, chief insights officer at UserTesting. “A key challenge is making sure AI is integrated into the right touchpoints and you have the levers in place to escalate from AI-powered experiences to front-line employees seamlessly. For example, if a customer is using a chatbot or IVR and expresses anger or frustration, the AI tech can route a customer to a person to help resolve the issue – especially for high-value customers.”

AI-powered search tools can also help to automatically detect intent in language and behaviour so that customer queries always yield relevant results. On the internal side, AI also enables CX teams to automate elements of their existing workflows, particularly in the areas of data analysis and testing/optimisation. “Not only can this improve overall efficiency but also the effectiveness of marketing campaigns and results,” says Harry Hanson-Smith, UK regional vice president at Dynamic Yield. “Plus, it frees up time for team members to work on other high-impact activities.”

He adds that “content can be aligned with what a customer is doing on the site or the best offer can be shown automatically to an individual versus the team having to build a flow for every different type of outcome or persona.”

However, Gaetano Ziri, innovation manager at Auriga, makes the point that AI should never be used to simply automate processes that aren’t good enough. “It’s critical that any AI CX project is accompanied by a root and branch reform of a bank’s business model and processes with a focus on customer centricity.”

In addition to improving the customer experience, AI can also be used to support staff training. “For example, a chatbot speaking in a natural language can help the staff to select the courses that are more suited for their professional profiles,” says Kumar. Information related to compliance and regulatory issues, which CX teams may need to be up-to-speed on, can also be made more accessible with AI-infused search tools and workflow integrations.

Finally, strong leadership is needed to successfully integrate AI into the CX function. “Leaders need to ensure that CX teams understand what they are trying to achieve, but most importantly, they need to get their buy-in and to ensure that they are on board and involved with the initial data architecture,” says Finnegan. “By engaging them prior to implementation and getting their input, together, they can identify clear objectives and real benefits for the business.”