Finding the Right Partners Matters: Takeaways from Acquire or Be Acquired

After a two-year hiatus, Bank Director's Acquire or Be Acquired was back with an in-person event in Scottsdale, AZ, last week.

More than 1,400 attendees gathered over three days to discuss the latest trends in industry consolidation, technology and innovation, and regulation. As always, there was something for everyone at the conference.

Neil Whittaker, CEO of SRM Europe, presented this year, walking attendees through our approach to strategy, specifically building an efficient technology roadmap. His talk included a dialogue with our clients at American National Bank of Texas about their experiences working with SRM.

Neil discussed how business strategy optimization – focusing on the critical macro items FIs should review – can lead to a better technology roadmap, dedicated investment, and seamless integration. The approach is prudent for financial institutions of all shapes and sizes.

When returning from large conferences, it's challenging to distill the information served into a handful of talking points. However, with the help of my colleague, Jason Berman, we clarified five topics that encapsulate this year's gathering.

1. The cryptocurrency craze is real. Most presenters mentioned blockchain and crypto, and the Crowe presentation on digital assets was standing room only. It was widely agreed that lending against crypto will continue to grow as digital assets become an increasingly popular option for consumers. FIs will need to brush up on crypto's accounting and IRS rules to avoid pitfalls.
2. There are a lot of fintech startups. Banks are struggling with evaluating fintech partners, and a big issue involves integrating new services with legacy core platforms. Another critical point is that very few banks have a data strategy. One presenter noted the importance of hiring data scientists to parse through, analyze, and organize data for current and future needs.
3. Do you customize or standardize? Many banks are revisiting simplified models. As we discussed recently, the key to success for some institutions may be avoiding At the same time, as fintechs outspend smaller FIs, there is pressure for banks to relentlessly focus on their technology roadmap.
4. Banks are very interested in M&A. Many discussions centered on mergers of equals, though acquisitions of fintechs was another popular topic. And more banks have a strong desire to learn about Banking-as-a-Service (BaaS).
5. A look into the future. AOBA's programming revealed that 2022 will be a year where banks clean up their income statements in terms of revenue opportunities, expense management, and reserve releases. Next year, expect better earnings and double-digit profitability from banks that make the right decisions this year.

The Bottom Line

The most significant theme echoed at AOBA was the importance of choosing the right partners – in banking, fintech, and advisory capacities. It means more now than ever. Today's decisions will determine the amount of success and the degree of independence individual FIs have this year, next year, and beyond.

Having a system in place to assess potential partners is equally essential as FIs aim for excellence. SRM is ready to help you evaluate partners and help you make the most of your next strategic partnership.