Don’t Skimp on Training

Difficult as it is to keep track of every technical detail, people issues?not technical issues?are the hardest part of merger integration, says Wray, who has overseen eight of Citizens’ 23 mergers. "Technology is necessary; you can’t screw it up," he says. "But it can’t ensure success. You can have a very clean technical experience but a miserable customer experience if branches don’t answer questions properly." He says that even if the technology is working, if branch employees are unhappy?or simply uncertain?with the new system, it’s tough for them to provide good customer service.

When Fleet merged with BankBoston, Fleet was forced to sell off many of its branches. So the Monday after conversion, most of its branches in the Boston area were staffed by former BankBoston employees struggling on legacy Fleet technology on which they hadn’t been adequately trained. "People in branches didn’t know how to use it," says Eckenrode. "There were lines out the door. And tellers were complaining that the systems they inherited were slower, older?a disaster." Second Curve’s Brown recalls witnessing a near fight between a frustrated customer and a teller the week after the conversion.

To ensure that tellers get enough training and support to feel comfortable by the conversion date, Citizens puts experienced Citizens employees it calls "branch buddies" into the new branches for at least a week after each conversion. Wachovia went further, permanently moving experienced First Union employees into legacy Wachovia branches a full four months before conversion. In addition to this preconversion "cross pollination," Wachovia sent teams of experienced users to the branches right after they converted. When customer satisfaction data indicated that customer wait times were up, Wachovia increased the length of time that the teams stayed from one week to three.

Think Phases, Not Big Bang

The big bang approach to system conversions is popular among acquiring banks eager to slash costs quickly. The Bank of America and Fleet deal, for example, is supposed to wring out $1.1 billion in costs. Although this strategy often works well when a very large bank acquires a smaller bank, it’s not recommended for banks with comparable sizes. The bigger the merger, the bigger the risk that something will go wrong when you try to convert all branches to the same set of systems over one weekend. For banks without time for a phased approach, thorough testing and mock conversions are critical, says TowerGroup’s Tubin, as is using a project management office to oversee the integration effort. Brown says if you don’t have time for a phased approach, don’t do the deal.