- 42% of banks created new best of-breed operating models instead of absorbing the target.
- 48% of insurers see between 25-50% of their target’s IT systems remaining in place in their end-state operating model.
- 52% of wealth managers leave the target operating on a stand-alone basis.
3. Manage the integration
Our survey reveals that integration has had a positive effect on the client and customer experience. The ability to retain customers and deliver on their growth objectives is a primary focus for most acquirers. They now include a customer experience workstream in their integration programs.
However, banks and asset managers need to watch target employee retention closely. The management team of the target business must be fully involved and represented in the integration process.
- 29% of banks say at least a quarter of employees departed, including 5% who lost more than half the target’s staff.
- 70% of insurers claim the client experience improved during the integration process.
- 67% of asset managers have integration teams numbering between 11-25 employees, with a further 30% having greater numbers.
The in-house resources dedicated to integration are quite substantial, and financial services firms also hire contractors to advise them on integration. Experience, leadership, dedication and communications are the characteristics required from a high-performing integration team, according to majority of financial services respondents.
4. Realize value
Synergies are the essence of value creation, and financial services companies feel that financial synergies (capital, tax) created the most value. However, they were also the hardest to realize according to respondents in the asset management and insurance sectors. Although there may be opportunities to improve sales productivity or leverage combined distribution channels, revenue synergies are seen as tougher to deliver in the banking industry.