Accelerating Bank M&A: Leveraging Third-Party Integration Services for Strategic Growth

Author: Christian Ericson
Published: October 21, 2025
Reading time: 4 Minute Read
Bank-MA

The banking industry has experienced significant change over the decades, primarily driven by digital transformation, technological advancements, and evolving customer consumption preferences. This includes the emergence of digital banking through online and mobile platforms. Regulators have increased oversight, making compliance with new rules, cybersecurity, and audit processes more challenging for banks.

This heightened regulatory burden and compliance costs can strain bank budgets and resources. Smaller banks especially face difficulties managing the additional costs associated with technical, cybersecurity, and regulatory requirements. As a result, regional banks and larger community banks continue to acquire or merge with other banks, sharing the increased costs caused by greater complexity, thereby improving efficiency ratios and profitability.

How Banks Evaluate Potential Acquisition Targets

Banks typically engage various third-party resources, such as investment bankers and strategic financial advisory firms, to evaluate potential acquisition targets. They also frequently rely on external vendors who specialize in evaluating banks’ existing vendor agreements pre- and post-acquisition and providing recommendations for consolidation standardization and negotiation.

However, when executing the actual acquisition efforts related to IT integration, banks typically rely heavily on their internal IT staff. While this may appear beneficial from a financial perspective, as it does not show up as a line item for the acquisition, this has several potential negative impacts on the organization, including the following: 

1. Delays in Technology Adoption

M&A integration has become more challenging for banks to execute, due to increasing interdependence and integration between a growing number of separate systems, which now require more technological resources than ever. M&A integration projects are long, typically lasting over 12 months. When managed primarily by internal IT teams, resources get stretched thin as they balance M&A projects with their regular duties. Banks that delay deploying strategic technology projects because of distractions due to M&A integration often fall behind, impacting their ability to meet customer expectations and maintain a competitive edge.

2. Reduced Pace of Future M&A

The increased pressure on internal IT teams during a 12-month M&A project can sometimes also contribute to turnover following an acquisition, due to the additional workload and lack of corresponding financial compensation. This can reduce future mergers and acquisitions, as the internal IT team needs adequate time to recover for the next acquisition.

3. An Inability to Offset Integration Costs

After integration, the IT organization must catch up on the backlog of other critical projects that were delayed due to the M&A integration. To address these challenges, banks sometimes rely on third-party technology integrators to manage project backlogs; however, they incur expenses that cannot be offset against the recent acquisition cost, as they are not directly correlated.

The Strategic Benefits of Third-Party Partners

Strategic financial advisory firms and executive management teams should consider involving third-party providers for program management, project management, and IT resource integration for future M&A projects. This approach allows internal IT staff to focus on their primary responsibilities without experiencing fatigue, accelerating the rate of future acquisitions, and keeping strategic technology initiatives on track.

Bank advisors, executive teams, and boards should conduct a thorough assessment with a third-party technology integrator before finalizing the financial evaluation of a bank acquisition, and make sure to also include the cost of integration by using external resources. This assessment should detail the costs associated with third-party resource integration and estimate completion timelines, often significantly shorter than in-house efforts. Such preparation enables acquiring banks to understand the actual costs of acquisitions and identify suitable third-party providers for swift execution. A company’s expenses associated with third-party integration services can be offset against the acquisition cost — if directly correlated with the integration.

New Era Technology — Supporting Banks in Mergers & Acquisitions

With nearly 30 years of experience in merger and acquisition integration services, New Era Technology offers global scalability and a national presence across the United States. We have successfully managed several large-scale bank integrations, including recently assisting a bank with more than 3,000 branches in integrating an acquired institution with 400 branches in just four months. New Era Technology also supports several Fortune 100 and Fortune 500 companies, including some of the largest banks in the U.S., offering IT field, break-fix, project management, digital transformation, and AI integration services. We also support major financial technology firms with integration efforts when acquiring and merging with other fintech companies.

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