Mergers and Acquisitions in Banking Could Hurt the Digital Experience: Let's Improve It

When banks merge, the focus is often on cost savings and market expansion. But bigger doesn’t always mean better, especially in the digital world. Today’s customers demand speed, personalization and seamless interfaces. Merging two complex organizations with different digital products can only increase friction for clients. With 55% of users ready to switch banks for a better digital experience, ignoring user experience (UX) during M&As (mergers and acquisitions) isn’t just an oversight—it’s a direct threat to your bottom line.

The largest M&A in the banking industry in recent years occurred in March 2023, when Silicon Valley Bank was acquired by First Citizens Bank. First Citizens Bank purchased 72 billion dollars worth of assets from SVB at a discount of $16.5 billion while also handling $56 billion of the failed bank's deposits. The same month, UBS acquired its troubled rival, Credit Suisse, for $3.25 billion. Both dramatic moves were essential to avoiding a global financial disaster.

As a result, First Citizens and UBS faced the critical challenge of merging two major institutions while maintaining customer trust. The true measure of success lies in how smoothly operations are integrated to provide a seamless customer experience, ensuring confidence among clients whose bank has been acquired. Given the existing customer habits and the differences in digital solutions, achieving a smooth integration is a complex challenge.

UXDA experts have analyzed financial companies' challenges following M&As and identified key issues that arise when aligning the product digital ecosystem with brand, business strategy and market needs. Below, we’ll explore how M&A activity affects the digital customer journey, the common obstacles financial institutions face—especially when traditional institutions join forces with Fintech—and the steps they can take to create unified, customer-centric experiences.

The Shifting Landscape of Scale

Traditionally, banks grew by merging smaller entities, believing that more assets would lead to greater stability and higher profits. However, with the evolution of technology, “scale” has taken on a new meaning.

Today, real efficiency no longer comes from opening more branches or hiring more staff—it comes from optimizing digital processes. When done correctly, this enables bankers to spend more time on high-value customer interactions and less time on administrative tasks. However, after M&A, digital customer experiences often suffer due to integration issues.

Merging different financial institutions—especially when it comes to data migration, core banking systems and client-facing digital experiences—is a significant challenge. Many things can go wrong, and based on real-life cases, they do. When mishandled, this can severely damage the customer experience and drive clients’ migration to competitors.

Modern customers require well-designed digital solutions that address specific needs rather than a patchwork of overlapping features. Moreover, 59% of consumers expect companies to leverage the vast amount of data they collect to deliver truly personalized experiences.

Merged financial institutions sometimes try to integrate overly broad offerings and become everything to everyone. The Interaction Design Foundation warns that overly complex products with poor UX can ruin trust, tarnish a brand, decrease conversions and hurt a business. Digital experiences can become bloated and unwieldy without strategic clarity, obscuring the core value proposition. 

Typical UX Challenges of M&A in Banking

In the digital age, financial industry M&As are more than just a business deal to expand market reach—it’s a pivotal opportunity to drive digital transformation and enhance customer experiences. However, this process presents significant UX challenges, including ensuring a seamless transition for customers, minimizing disruptions in digital banking services, unifying different platforms and ecosystems and maintaining brand trust.

First Typical Case: Creation of a New Brand

In 2017, DNB and Nordea, two major Scandinavian banks, completed the merge of their Baltic operations to create Luminor Bank, a new, independent financial services provider serving over one million customers. 

With a fresh brand and digital experience, the challenge was to unify two distinct customer bases—each accustomed to different digital interfaces, languages and communication styles. Building trust in a completely new brand identity while guiding users through the transition was essential, ensuring they understood what the change meant for them and familiarizing them with their new bank.

When two or more banks merge to form one entity with a new brand identity, customers face uncertainty about account changes, new digital tools and potential service disruptions throughout this process. Adjusting to a new banking platform can be confusing, and trust and security concerns may arise during data migration. A lack of clear communication and overwhelmed support teams can further frustrate clients.

Key challenges:

• Customer Trust and Familiarity: Two distinct customer bases must transition to a completely new banking identity, which can create uncertainty and hesitation.
• User Experience Disruption: Customers accustomed to different interfaces, account structures and service experiences must adapt to a unified platform.
• Communication Gaps: If the rebranding and migration process isn’t clearly communicated, customers may feel lost or skeptical about security and stability.
• Digital Adoption Curve: Users need guidance on navigating new digital tools and interfaces, minimizing resistance and frustration.

Strategic digital experience tasks:

• Stability-Focused IT Migration: Craft a unified digital experience by developing a seamless transition aligned with the new brand identity, ensuring consistency across platforms to maintain trust and familiarity. Conduct phased rollouts with rigorous testing to prevent service disruptions.
• Strategic Alignment: Map digital touchpoints to align with the new brand’s positioning and vision. Align the digital ecosystem with business objectives by mapping out digital touchpoints to support the new bank’s strategic goals, ensuring the experience enhances engagement, efficiency and long-term growth. 
• Detect Friction and “Wow” Points: Evaluate existing user journeys from both merging banks to identify key differences and potential friction points, ensuring a smooth transition. Conduct UX research to blend the best elements from both legacy banks, creating an intuitive, modern interface.
• Ensure Migration: Design a seamless customer migration experience with clear communication strategies to minimize confusion, reduce frustration and keep users informed and reassured. Develop transparent messaging about changes, benefits and customer impact, reinforced by omnichannel support.
• Empower Adoption: Design a positive and intuitive client adoption experience to ensure a smooth transition that ensures excitement, trust and long-term loyalty. Leverage interactive guides, webinars and in-app tutorials to ease the transition and reinforce the new brand's value proposition.

Second Typical Case: One Bank, Two Brands

In 2018, Deutsche Postbank AG (Postbank) merged with Deutsche Bank Privat- und Geschäftskunden AG (Deutsche Bank), aiming to create a market leader with over 20 million clients and €325 billion in client business volume. The strategy maintained both brands to serve distinct market segments, with Deutsche Bank focusing on advisory services and risk management, while Postbank catered to day-to-day banking needs. 

The data migration process is highly complex and can directly impact the acquired bank's clients, as seen with Postbank’s customers during IT integrations. Many customers were locked out of their banking accounts, significantly increasing traffic to call centers. As a result, thousands of clients were unable to access their accounts for weeks, leading to Postbank becoming the lowest-ranked German bank on Trustpilot in 2023, with a score of 1.2 out of 5.

When one bank acquires another but retains both brands to target different market segments, the primary customers' pain points revolve around uncertainty, trust and technical stability. Customers of the acquired bank may worry about how the acquisition will impact their finances and require clear, transparent communication to feel secure. Technical errors during IT migrations, data transfers or service integrations can lead to frustration, account lockouts and service disruptions, ultimately damaging customer trust.

From a business perspective, the key challenge is ensuring that both brands maintain their distinct identities while delivering a seamless, unified experience that aligns with their target clients. This requires providing a consistent brand experience across each brand's entire digital product ecosystem, including the mobile app, online banking, ATMs, social media platforms, etc.

Key Challenges:

• IT Integration Risks: Complex data migrations can lead to technical errors (e.g., Postbank’s account lockouts) and eroded trust.
• Inconsistent Brand Experience: Each brand serves different customer segments, requiring distinct digital strategies.
• Customer Confusion: Clients need clear guidance on which brand to engage with, especially if products overlap or if migration occurs in phases.
• Identities Overlapping: Balancing distinct brand identities while ensuring a cohesive digital experience design.
• Support Overload: Managing customer frustration from inconsistent service levels or overwhelmed support channels.

Strategic digital experience tasks:

• Assess the Digital Experience: Assess the alignment of the existing digital experience to determine whether it effectively reflects the desired brand strategy and business goals.
• Define an Improvement Plan: Identify pain points and areas for improvement by analyzing client expectations, frustrations and gaps in the digital journey to develop a strategic action plan for enhancements.
• Mapping a Digital Ecosystem: Develop a strategic digital ecosystem roadmap that ensures the digital experience meets customer needs while reinforcing both brands' business objectives. Optimize the digital ecosystem to reflect each brand’s unique identity while ensuring technical stability.
• Onboarding Optimization: Conduct ongoing user research and align business goals by continuously shaping a strong brand experience through digital interactions to enhance client satisfaction and long-term loyalty.
• Unify Systems: Maintain brand-distinct digital experiences while ensuring that core banking functionalities, information architecture and design systems remain unified across platforms to increase efficiency. Implement cross-brand customer service teams to provide seamless assistance regardless of which brand the customer interacts with.

Third Typical Case: One Brand Takes Over Another One

In 2024, UBS announced the completion of a merger between UBS Switzerland AG and Credit Suisse (Schweiz) AG, marking the end of Credit Suisse as a separate entity. While former Credit Suisse (Schweiz) AG clients have now transitioned to UBS Switzerland AG, they will continue interacting with UBS through existing Credit Suisse platforms and tools during an interim period.

The client migration started at the end of 2024 with a test that involved migrating hundreds of Credit Suisse clients from Hong Kong and Singapore. However, in 2025, most client transactions in Switzerland will migrate to the UBS platform.

Clients must adapt to a new brand, policies and digital ecosystem when an acquiring bank fully absorbs the acquired bank, phasing out its brand and integrating its customers. Even if their current experience initially remains unchanged, transitioning to new systems is inevitable. This transition might introduce a learning curve, requiring them to adjust to new digital tools and interactions. 

Key Challenges:

• Customer Loyalty Erosion: Credit Suisse customers may feel forced into a relationship with UBS, leading to dissatisfaction or attrition.
• Data and Platform Migration: Customers may need to switch banking apps, account structures or loyalty programs, which can feel disruptive, leading to frustration.
• Emotional Disconnect: The acquired bank's loyal customers may struggle to accept the new brand, especially if past tension or competition between brands existed.
• Specific Onboarding Required: Acquiring banks have to guide customers through a new digital ecosystem, policies and brand identity.
• Customer Education: Acquiring banks have to manage a learning curve as new users must adapt to unfamiliar tools during phased migrations.

Strategic digital experience tasks:

• Transparent Migration Roadmap: Clearly outline what will change, what will stay the same and the benefits of the transition for former customers. Retain familiar digital touchpoints and gradually introduce the new brand, ensuring a smooth emotional transition.
• Structured Onboarding: Assess critical onboarding challenges by identifying key changes and potential friction points clients will face when transitioning to the new digital ecosystem. Design a seamless transition strategy by developing a structured onboarding process with clear guidance to help users prepare for the change and adapt effortlessly.
• Exclusive Welcome Benefits: Enhance client onboarding and engagement by ensuring new users clearly understand their benefits and gain confidence in the new bank through intuitive experiences and transparent communication. Provide loyalty incentives or feature enhancements to make customers feel valued rather than simply "transferred."
• Customer-Centric Data Migration: Offer seamless single-login transitions with auto-migrated data to avoid the need for manual account reconfiguration.
• Clear Support: Leverage the acquiring brand’s reputation to build confidence through consistent messaging and reliable service delivery.

Fourth Typical Case: Fintech-Powered Expansion

In 2021, U.S. Bancorp, the parent company of U.S. Bank, entered into an agreement to acquire TravelBank, a San Francisco-based Fintech company offering an all-in-one, tech-driven expense and travel management solution. The acquisition aimed to accelerate the bank’s goal of providing businesses with greater confidence, control and convenience in managing payments and expenses.

As a result, the first outcomes of this acquisition emerged in 2023 with the launch of a new commercial card designed to help businesses automate expense management, control spending and earn rebates on business expenses. However, even before the acquisition, a partnership had already been established by integrating the U.S. Bank Instant Card™ directly into the TravelBank application, creating an all-in-one virtual card, expense and travel management solution.

M&As between financial institutions and Fintech companies add another layer of complexity, mainly because Fintechs typically prioritize agility and innovation, while banks operate in a more structured regulatory environment.

When a traditional bank acquires a Fintech company to enhance its digital offerings and innovation capabilities, evaluating current user journeys and strategically planning how both digital products can evolve to support growth is crucial. Without careful planning, the user experience can become overly complicated, leading to confusion and inefficiency. Ultimately, it’s not just about adding features—it’s about delivering real value to users.

Key Challenges:

• Approach Clash: Fintechs prioritize speed, agility and innovation, while banks emphasize risk management, bureaucracy and regulatory compliance.
• Tech Integration Complexity: Fintechs use modern cloud-native architectures, whereas banks often rely on legacy systems that require significant updates.
• Customer Expectation Gaps: Fintech users expect speed and simplicity, while traditional bank clients focus on reliability and regulatory assurance.
• Brand and UX Mismatch: A Fintech’s modern, sleek brand interface may clash with a bank’s formal and generic experience, creating inconsistencies.
• Different Risk Tolerances: Traditional banks often evaluate decisions using conservative metrics, whereas Fintechs are typically more open to exploring new, innovative models.
• Talent and Culture Gaps: The specialized skill sets that Fintech teams bring—data science, machine learning and AI/UX research—may be underused if the bank’s corporate environment isn’t prepared to adapt. Conversely, Fintech employees may struggle with the hierarchical structures, lack of agile workflow and slower approval processes found in many banks.

Strategic digital experience tasks:

• Innovation Design: Lead user-centered innovation by leveraging ongoing user research and feedback to implement new capabilities that maximize client benefits, reinforce the value of both brands and align with strategic business goals.
• Integrate Digital Journeys: Conduct a holistic evaluation of existing user flows across both the bank and Fintech’s digital products. Identify synergy points where features can be combined or streamlined, ensuring users experience a cohesive ecosystem rather than a patchwork of disconnected services.
• Establish a Unified Design Framework: Develop a shared design system that respects the Fintech’s modern, user-centric approach while aligning with the bank’s brand standards and regulatory requirements. Ensure consistent visual language, tone of voice and interaction patterns across all customer touchpoints.
• Implement Agile Compliance: Design an iterative delivery model that embeds regulatory checks into each phase of digital product development. This approach allows the Fintech’s speed and innovation to thrive without compromising the bank’s security, compliance and risk management standards.
• Empower Support: Simplify the digital experience to reflect Fintech-like speed and convenience, while bolstering user confidence with transparent policies and robust assistance from the bank. Offer clear user guides, live help channels and proactive communication that addresses potential friction points, reinforcing trust and adoption in the newly integrated features.

Turn M&A Into a Digital Advantage

M&A can diminish competitiveness if it leads to chaos, added burdens and the reinforcement of outdated practices that don't align with today's digital marketplace demands. To avoid this, financial institutions must approach M&A with strategic clarity and purpose. The merger should be seen as an opportunity to modernize technology while also reimagining how the institution delivers value to its customers. Here are a few thoughts on how to turn the challenges of M&A into a digital advantage:

1. Define a Target Audience and Commit to It

A successful M&A begins with a deep understanding of your most valuable customer segments. Identify the specific groups your financial institution is best positioned to serve profitably and focus on curating tailored digital solutions for them. By narrowing your focus, you can:

• Clarify priorities for product design and development.
• Avoid spreading resources too thin on underperforming offerings.
• Build a stronger, more personalized customer experience.

Rather than offering an extensive range of products, concentrate on delivering the right solutions to the right customers. This strategic focus lays the groundwork for a personalized user experience, meaningful innovation and efficient resource allocation. The Forrester report (2024) shows that brands focused on customer needs experience 41% faster revenue growth and 51% better customer retention than those that aren't.

2. Modernize the Tech Stack Early

One of the most significant opportunities during a merger is technology renewal. Addressing legacy systems early in the process can prevent technical debt from becoming a barrier to growth. Key strategies include:

• Consolidating platforms to reduce complexity and improve efficiency.
• Leveraging cloud-based and AI solutions.
• Ensuring seamless integration between the merged entities.

A modernized tech stack accelerates the deployment of new financial services and enables the organization to stay ahead of market demands. McKinsey research (2022) found that 74% of CEOs view technology integration in M&A as a key driver of competitive advantage and growth, not just a cost. Cloud-based solutions with modular architectures enable fast deployment of new services and smoother integration between merged entities.

3. Champion a Culture of Data Literacy

Data is at the heart of any digital transformation in finance, but its value depends on how well employees can leverage it. Encourage employees—from frontline staff to leadership—to view data as an integral part of daily tasks. Building a data-literate culture ensures that teams across all levels can make informed decisions and enhance customer interactions. To build this culture:

• Provide training to help employees understand and use analytics tools.
• Embed data-driven decision-making into everyday workflows.
• Use AI insights to refine digital self-service portals and improve customer experiences.

Empowered employees can deliver an excellent customer experience, driving both satisfaction and loyalty. When teams are comfortable using analytics, conversations with customers become more meaningful, and digital self-service portals can be refined based on actual usage patterns.

4. Streamline Internal Workflows

Digital transformation isn’t just for customer-facing applications. Simplifying and automating internal processes can significantly enhance employee productivity and morale. Consider the following

• Implement user-centered design principles and simplified interfaces for internal tools.
• Automate routine administrative tasks to reduce bottlenecks.
• Identify and resolve friction points in back-office operations.

For example, by minimizing the time loan officers spend on administrative tasks, they can dedicate more attention to high-value customer interactions—like offering personalized insurance advice to protect customers during critical life moments—boosting both brand loyalty and engagement.

5. Communicate a Unified Brand Vision

Mergers often involve blending distinct brand identities into a cohesive narrative. Consistency of a digital brand identity is crucial for a successful digital customer experience in finance and for reassuring customers and stakeholders that the merged entity is stable, forward-looking and well integrated. Steps to achieve this include:

• Implementing a unified design language, design system and tone of voice.
• Ensuring a consistent brand experience across all channels—from mobile apps to social media.
• Highlighting the benefits of the merger to customers in clear and compelling ways.

A unified financial brand vision and identity builds trust and reinforces the organization’s commitment to delivering value. According to EPAM research data (2020), 63% of respondents cited trust as the primary reason for choosing their main bank.

6. Balance Compliance and Innovation

For bank/Fintech mergers, it’s critical to set a framework that allows rapid innovation while maintaining regulatory oversight. Create multidisciplinary teams that understand both the creative and compliance dimensions to streamline product integration without ignoring risks:

• Establish multidisciplinary teams that combine expertise in compliance, technology and customer experience.
• Create frameworks that streamline product integration without compromising on risk management, customer experience and brand identity.
• Ensure collaboration among the product, creatives and regulatory stakeholders to accelerate innovation.

By aligning compliance and financial customer experience (CX) with innovation, organizations can maintain trust while pushing the boundaries of what’s possible.

7. Focus on Employee Integration and Engagement

Mergers often bring together teams from different organizational cultures, which can lead to friction if not managed effectively. McKinsey's report (2024) shows that companies effectively managing culture during integration are 50% more likely to meet or exceed their synergy targets, both in cost and revenue. To ensure a smooth transition and maximize employee productivity:

• Invest in change management programs that address concerns and align teams around shared goals.
• Encourage open communication to build trust and transparency during the integration process.
• Provide training and development opportunities to help employees adapt to new tools, workflows and expectations.

Engaged and motivated employees are essential to realizing the full potential of a merger, particularly when it comes to delivering a seamless customer experience.

Final Thoughts: Sustainable Growth Through Customer-Centered M&A

Financial institutions' sustainable growth in a competitive market hinges on their ability to deliver superior digital experiences. A customer-centered approach to M&A, focused on operational excellence rather than sheer asset size, offers a strategic advantage. Banks can scale their operations efficiently while delivering precise, personalized care to their customers by modernizing the infrastructure, refining product portfolios and building data-savvy teams.

This forward-looking strategy also makes the institution more appealing in future M&A opportunities. A flexible, tech-driven bank with a clear, focused brand is more competitive and a more attractive partner in the M&A space. It demonstrates adaptability, innovation and the ability to integrate smoothly into a larger vision.

M&A remains a powerful growth tool for banks looking to expand their reach, and partnerships with Fintech companies open doors to innovative capabilities and customer-friendly solutions. However, the true success of these initiatives depends on how effectively the merging organizations can:

1. Integrate technology—ensuring seamless connectivity and improved user experiences.
2. Harmonize cultures—fostering alignment in values and collaboration across teams.
3. Prioritize the customer experience—keeping the end-user at the core of all decisions.

Institutions that adopt this customer-centered approach can achieve more than mere balance sheet growth. By targeting the right market segments, modernizing legacy systems and embracing a data-driven mindset, they position themselves as leaders in delivering intuitive, engaging digital experiences. These experiences drive customer loyalty and set the foundation for sustainable, long-term growth in an ever-evolving financial landscape.

M&As are complex and long-term processes, so it’s crucial to have a strategic partner focused on the user experience. With an agile partner providing ongoing support, the process becomes smoother, more efficient and less stressful, helping ensure proper resource allocation and, ultimately, the company’s long-term success. Without this, there’s an increased risk of losing users and misaligning teams.

UXDA helped its clients navigate their M&A journey, adapting quickly to shifting business goals. By analyzing both financial companies' digital platforms, we ensured a seamless, intuitive user experience with no functional overlap. We focused on addressing pain points, creating a smooth transition and maintaining open communication with both teams. Our approach kept the end user at the heart of the process, ensuring the merged platform continued to meet evolving needs.

Ultimately, the most successful financial institutions and banks will be those that combine strategic M&A with a relentless focus on serving their customers, because in today’s digital-first world, sustainable growth is built on trust, innovation and a seamless digital experience.

M&A in banking presents strategic opportunities for market expansion, operational synergies and competitive advantage. However, from a digital CX and brand perspective, each M&A scenario introduces distinct challenges that can either strengthen or damage customer trust and loyalty.