Here’s a look at how some CIOs are now making it possible for banks to put customers first during mergers?and why focusing on customers is an approach that merging organizations can take, well, all the way to the bank.

Know What You’re Getting Into

When BankAmerica merged with NationsBank to form Bank of America, BankAmerica was supposed to convert to NationsBank’s "model bank" platform for its deposit processing system, generating $500 million in onetime savings, according to Brown, who is also a former Wall Street analyst and cofounder of Bankstocks.com. But had either bank’s CEO checked with his IT staff, he would have discovered that the platform was not robust enough to handle the volume from California. Today, that state remains on a separate processing system. If a customer opens an account in Charlotte, N.C., and travels to the West Coast, a California branch won’t be able to access her account. An alumnus of Bank of America tells Brown that the bank is now running on five deposit systems?something that will make integration of FleetBoston into Bank of America’s systems all the more difficult.

At Southwest Bank of Texas, Executive Vice President and CTO Buddy Cox tries to avoid such unpleasant surprises by getting involved early in the evaluation process. Just after financial models show that an acquisition would make economic sense, he and his team start looking for any infrastructure compatibility issues that would need to be addressed before the conversion. For example, when the bank was purchasing a three-bank franchise, early due diligence revealed that each bank ran on a different system, meaning that each bank would have to be converted separately to minimize customer impact. Knowing that, Cox built extra time into the merger time line, and the bank was able to account for the added expense in the purchase price. He also looks at such things as whether the candidate has just signed a five-year outsourcing deal with an expensive exit clause. In such cases, he recommends adjusting the deal’s purchase price to reflect that. "Having tech teams or leadership involved early in the deal process is a critical component to deal success," says Cox.

Experience is also a great teacher. When it merged with Wachovia in 2001, First Union was still reeling from the disastrous CoreStates merger. And Wachovia had recently fumbled the acquisition of two Virginia banks by attempting to convert both over the same weekend. "We looked each other in the eye and said, ’This time we don’t plan to lose a customer,’" says Jean Davis, senior executive vice president and head of IT, e-commerce and operations for the newly merged institution, which took the Wachovia name.