Global Banking and Finance Review: Vice President and Head of Cognizant’s Banking and Financial Services Practice in the UK & Ireland Highlights the Role of IT in the Success of Fund Management Mergers

“Mergers are an inevitable response to increasing costs; however, this should not lead to less innovation or, over time, fewer business opportunities in the sector,” writes Tony Virdi. “Bringing together two separate businesses must create a result that is more than the sum of their parts, with the respective weaknesses reduced and specific strengths bolstered.” Excerpts from the article:

“When two businesses have very distinct, well-established cultures that is often easier said than done; however, we believe that the effective use of IT is key to moving the merger process forward successfully.

The IT changes associated with a merger can be a powerful aid to promote transparency…a merger is an opportunity to upgrade underlying architectures, not only to make sure there is a seamless migration of data during the merger, but to enable staff to provide a more valuable and seamless customer experience afterwards. By freeing up some budget due to merger savings, there should also be an investment in innovation that targets improved customer value propositions and enhances competitive advantage.

Increasingly the digital channel, which can provide both the opportunity to boost revenue (through cross and up-selling), as well as boosting customer trust (by showing how a particular pot of money is doing at any one time, and why) is at the forefront of activity. A more agile, flexible architecture, allowing a user-friendly front-end platform with faster access to data, is a vital first step in making this type of interface a reality.

How a company combats regulatory threats can be a reflection of how risk, customer trust and technology are viewed within the organization’s culture. A merger is an opportunity to promote the positive aspects of this within both companies involved, and this ought to be reflected in how the merger of IT systems is conducted. The first consideration should always be to minimize any impact on the customer and a robust change management process, coupled with an approach that makes the customer the top priority, should ensure that this is possible.

With regulatory authorities worldwide taking a proactive and much more zealous approach to their work, and the financial industry now a highly politicized sector, it is prudent to take a cautious approach to regulations at a national and pan-national level. It is important to take this into account when matching a merged technology and business process infrastructure against the business plan for the newly merged entity. New compliance management platforms, and integrated, automated analytics technology, can ensure regulatory peace of mind while still streamlining the business.”

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