October 29, 2020

Innovation Out of Mergers and Acquisitions

Eltropy Blog

Merger Innovation

When two Credit Unions come together in a merger, more often than not, they are stronger after the acquisition than they were before. 

According to CEO Advisory, while the number of Credit Unions decreased from a high of nearly 24,000 in 1969 to nearly 5,346 in 2019, the overall assets of Credit Unions rose by billions of dollars. Together, smaller Credit Unions can become stronger and offer more products, which in turn attracts new members. But how do customer strategies, such as Text Messaging, survive the melding of two corporate cultures?

At the merger announcement, a future vision and strategy should be communicated to all key stakeholders. That includes information on what member services will be enhanced, such as communication. Now is the time to address any shortcomings with available technology from the M&A partner. When one of the parties can demonstrate the benefits of Text Messaging with members, that’s a compelling case to institute it throughout the newly formed credit union. 

Being forthcoming about direction lessens employee anxiety, boosts morale, and retains talent as well as members. That’s how to build momentum and enthusiasm for the merger and correct any misinformation and myths that might arise.

In a merger, both Credit Unions must focus not only on internal, operational advantages, but also on member benefits. That approach tends to deliver better results over time – increased deposits, more members – compared with a strong-arm approach.

When one CU has customer-centric solutions, such as secure Text Messaging, and the other does not, it becomes the responsibility of the more customer experience-oriented Credit Union to ensure the program continues by educating about the benefits, including:

  • Text Messaging allows credit Union associates to proactively reach out to members to address both new opportunities and account issues
  • Members can multi-task while resolving their queries
  • People respond at a much greater rate to Text Messages than to other means of communication

In any merger, the goal is that the whole is greater than the sum of its parts. Credit Unions with passion for the benefits that Text Messaging brings to members, confidence in the excellent experience it provides, plus the willingness to educate, provide a formula for the combined institution’s future success.

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