As bank M&A activity picks up, the real challenge is no longer just getting the deal done. This episode explores why technology readiness, integration strategy, and customer experience now play a bigger role in determining whether a merger creates value or creates risk.
[Webinar] The M&A Tech Conversion Playbook: Steps and Considerations to Shape Long-term Value
[Report] 2026 State of Commercial Banking
Cheryl Brown
Hello and welcome to The Purposeful Banker, the podcast brought to you by Q2, where we discuss the big topics on the minds of today's best bankers. I'm Cheryl Brown. Welcome to the show.
Bank M&A is having a real moment again, but this cycle feels different. Yes, scale, efficiency, and market expansion still matter, but more banks are also thinking about how technology affects the speed of integration, the customer experience, and the ability to realize value after the deal closes.
So today I'm welcoming Tim Daley to the studio. Tim is a principal digital strategist at Q2, which means he spends a lot of time with our bank and credit union customers talking about their challenges, their goals, and their strategies, and he has his ear to the ground, so to speak.
So Tim will be leading a webinar soon with several folks from our customer financial institutions to talk about what a successful M&A technology playbook looks like. And you can catch that webinar on April 29. And I'll put a link to register in the show notes. So welcome, Tim. Welcome to the show.
Tim Daley
Hey, thank you so much. I appreciate you having me. Looking forward to it.
Cheryl Brown
I think this is your first time on The Purposeful Banker, am I right?
Tim Daley
Yeah, I believe it is. What took you so long? No, I'm just kidding. Again, I'm excited to be here.
Cheryl Brown
Well, awesome. Hopefully you love it and you'll come back many times. So let's dig right in.
Tim Daley
100%.
Cheryl Brown
I said that M&A is having a real moment again. Help me frame that assertion. How has activity ramped up in the past quarter or two?
Tim Daley
Yeah, it was interesting. And that's a really good question. It looked like we were cruising along, just a relatively small number of deals between first and second quarter in 2025, and then the floodgates opened. The second half of the year dwarfed the first half of the year, and that momentum seems to be cruising into 2026. What I saw in some periodicals research that I've been doing is that the regulatory environment has had a big impact on that. And so we went from an environment that was frozen to an environment that is fluid. And that seems to be a really interesting way to describe it.
Cheryl Brown
Yeah. So that has to be a monumental change. When you open up the doors, then everybody starts thinking about M&A differently. It's more a conversation of what can we do rather than what maybe should we do? Do you see that happening at all?
Tim Daley
Yeah. So with M&A's velocity increasing, so regulatory approvals are coming faster, and that means that I can make decisions more in real time, if that makes sense. Now, I may have been on the fence for a while, been watching the environment, looking for potential ways to expand. But as deal velocity has been able to improve, I can be maybe more opportunistic, and I can also execute against a strategy faster. And so what that means is if I make a decision, "Hey, I'm going to go merge." And whether that merger is for scope or scale, like, "Hey, for scope, I'm buying a piece of business that I didn't have before.” I'm going to get more business capability. I'm a retail bank or I'm a retail credit union. I need to get into small business to diversify income streams.
Those are scope mergers, and they're happening, but they're also scale mergers. If I just need to get bigger in order to survive the regulatory environment I find myself in. So if I'm approaching that $9 billion threshold or the $10 billion threshold, I'm a $7 to $9 billion bank, I need to get to $15 quick. So those are scale mergers.
And both those types of decisions are occurring faster. I can execute against that strategy in a much more real-time way. And that has seemed to spur these decisions going. I don't have to think about it as a board, "Man, it's going to take me a year to get this decision done." I can get the decision from my regulators now in right around six months, and I can make a faster, better decision and then start the execution phase of that merger rather than just waiting for the red tape to unravel itself.
Cheryl Brown
Right. And you talk about scale as being a reason for M&A activity, but one thing that's come to light, and we touched on this a little bit in this year's State of Commercial Banking report, is this idea that technology is not necessarily just an afterthought, but it's becoming a deal driver maybe. So for a bank leadership team, when does technology stop being a supporting issue and become part of the actual deal thesis?
Tim Daley
Oh, such a good question. And I think about it in a couple of different ways. One, being, call it, at the forefront of technology or being prepared is a way to, one, execute against that merger strategy faster, but it's also, you're less likely to be acquired. So if I am more efficient, if I've got a better handle on my technology, I've got the ability to move a little more nimbly because I'm not having to hand crank a bunch of data. And thank God people are not hand cranking as much. That's more of an extreme example. Just I don't have to manage legacy systems, outdated processes, those types of things, that provides a really ... It's both the weapon and the shield.
I can go out into the market. I can bring somebody and merge somebody into my ecosystem faster because I know exactly how that's going to run, but at the other time, a less technologically savvy potential suitor is you just can now compete them out. And I think you would end up being on the acquiring side of that. Your technology stack will last if there is a deal done and if there's ... and my estimation is, you're going to be on the acquiring side rather than on the acquiree side.
Cheryl Brown
Yeah. I mean, I've spent a lot of my career in working with credit unions, and it seems to me, especially the smaller credit unions, seem to be more agile when it comes to technology adoption. They can get the newer bells and whistles faster because they have less internal red tape to get through, they can deploy faster. Does being an early adopter of some of the newest innovations, does that make you more of a target or less of a target if you're a small institution?
Tim Daley
Well, so credit unions are interesting, in my opinion. Well, in my experience, I was a banker for a while, I was consultant in the space for almost a decade of my life, and now I work with Q2. So across that spectrum, credit unions historically have been better at digital delivery than their bank peers. And it makes sense. If I'm going to stand up a branch that's now in these days, what is that, a $4 to $5 million proposition? If I don't have that kind of capital to invest, but I can invest in some kind of digital delivery that gives me a commensurate reach, I can deploy that faster, I can deploy it across a larger geographic area. I don't have to have as large a branch network, and they typically don't.
So one of the reasons digital has allowed them to outpace their similarly sized bank peers because they don't have a similarly sized branch network. So I'm bullish on credit unions.
From a technology adoption perspective, and call it preparedness, hey, does that allow them to act faster or do they become a target? "Hey, I want that bright, shiny apple of a technology stack that that credit union has created." I can see where that would make sense, but there is a ... I want to put it ... there's an arrogance almost from an acquisition standpoint. If I'm the larger institution acquiring the smaller institution, I'm acquiring you for a reason. You were not necessarily doing something correctly.
I don't know that that technology stack ultimately translates into, "Hey, they can do something so much better than me, and I need that," on the credit union side. Really credit unions look, in my experience, they're looking at value to member from an acquisition standpoint rather than return to shareholder on the bank side. "Does this add the value to being a member of this particular combined institution that I want to express for my membership on whole?"
So candidly, I would say that technology is actually going to allow that smaller institution to acquire a peer that's less technologically savvy, get some scale, go do it again, get some more scale, go do it again. I want those credit unions that are technologically savvy or forward-thinking or leaning, call it, smarter, for lack of a better phrase. I want them to acquire, and I want them to survive, and I want them to get across that threshold that allows them to ... maybe they're looking at a billion-dollar threshold. If they get across a billion, you're a big credit union at this point. And at that point, you've got the scale to survive the environment in which you're operating. Yep.
Cheryl Brown
And I asked about credit unions just because that's in my wheelhouse, it's my frame of reference, but two questions, it brought up two questions for me what you just said. One is, are we seeing the same kind of M&A activity in the credit union sector as we are in banks? Number one. And then number two, would you say the same thing about a small bank that you just said that they would be interested in their peers and they would be the driver because they have the adoption of the newer tech?
Tim Daley
Yeah. So we are seeing M&A activity on the credit union side. We're seeing more credit unions purchase banks, so that scope merger. Credit unions, to their credit, are recognizing the opportunity in front of them to, call it, embrace small business banking and to kind of ... they can diversify their lending portfolio, they can diversify their income stream, they can buy some expertise in the space, and then they can scale. And I think that's a really ... Again, I'm very bullish on the credit union side. So yes, we are seeing credit union mergers quicken.
It's a little bit more of a ... And well, from a culture combination, credit unions have not struggled, but they've had to wrestle with combining two disparate cultures when credit unions merge. We are both part of the credit union movement of people helping people, but we express that principle in different ways. And so blending boards and blending management activities and all those things are ... You just have to get through it, you have to wrestle with it. When you're buying a bank, it's a much more, call it, a cut-and-dried transaction.
Cheryl Brown
Everybody's on the same page about what the goal is.
Tim Daley
On the same page. Yeah, everybody's on the same page of what the goal is. And just from my experience in just talking with some of the credit unions, some of those employees of the banks have really valued the transition to the focus on the member. And so it has been a really interesting ... It's an interesting cultural shift for those historic bankers or traditional bankers to become part of the credit union movement, and a lot of them really enjoy it.
The second part of the question was, "Hey, would you recommend that or do you see that same thing happening in small banks?" We are very fortunate to work with some really dynamic, call it, less than $500 million banks, and they are actually ... they're growing faster than their similarly sized, less technologically forward-thinking peers, so call them smarter banks. And that gives them the opportunity to take advantage of a merger when it pops up. So yeah, I would absolutely agree that the technology stack allows you to focus more on what's coming next rather than keeping what's going on running, if that makes sense.
Cheryl Brown
It makes total sense.
Tim Daley
Yeah.
Cheryl Brown
So we hear a lot about day one in mergers and acquisitions. What does a strong day one actually look like from a digital banking and a customer experience perspective?
Tim Daley
Yeah, that's an interesting one. So I did used to do a lot of implementations as a consultant. I've been fortunate enough to work with some of our implementations at Q2 here. And just candidly speaking, the two biggest things that can throw your implementation or your conversion, your merger into a ditch is first-time login process and then, call it, data or account accuracy once I'm in the profile. So I would rather it be down than inaccurate, if that makes sense, because that will blow up your contact center. The other thing is that first-time login process, if I can't get in, that will blow up your contact center.
But so strictly speaking from a digital banking, "Hey, day one, I was this institution, and today I'm this institution. And that first-time login process, how do I get access to the accounts that are now combined into the entity?" And then ensuring the accuracy of the data there, balances, transaction history, all those really good things, just making sure that that looks right and is right so that your clients feel and/or your members feel confident that everything went well.
Behind the scenes, I could still be running two different cores. I could still be running multiple systems in the background. But from a client facing how they access what's most important to them, and selfishly, that's my money, it just has to be right.
Cheryl Brown
Yeah, I don't think that there's anyone among us who can't empathize with the experience of having your bank be merged. And suddenly you have a new bank name, and that's the least of your concerns because you also probably have a new online experience. You maybe have a new mobile experience. And that what's happening behind the scenes, you have no idea what the duck is doing under the surface of the water, right?
Tim Daley
100%.
Cheryl Brown
As long as you can do what you need to do on day one, that's what matters. And I know that in the ...
Tim Daley
I guess I have to add one caveat, if that's OK. It's not directly related to digital banking, but just from a merger standpoint, payments. They've got to be like, "My card has to work day one." Once that happens, I have to be able to get cash, if you use cash, which less than half of the adult population in United States still does, but if I have to be able to access my funds, whether through a swipe, a tap, or whatever it happens to be, and/or access cash, that is also ... From an experience standpoint, yeah, I need to be able to log in, digital technology, that's what we do, but just payments is absolutely critical as well, just to run that thought out.
Cheryl Brown
My direct deposit, my automatic payments, all the payments that I have set up to pay automatically each month, as a customer, I don't want to have to mess with any of that. I just want it to be seamless.
Tim Daley
100%.
Cheryl Brown
Well, and I don't want to give away too much of what will be covered in the webinar. And I know that we're going to have some of our own bank and credit union, I think, representatives on that webinar to share their experiences, which is really where the true value of the webinar comes from, is listening to each other, not necessarily listening to us at Q2.
Tim Daley
100%.
Cheryl Brown
But can we just touch slightly on this idea of an M&A technology playbook? Some of the dos and don'ts of a solid M&A approach when it comes to technology.
Tim Daley
Yeah. So yeah, without letting too much of it out, certainly a data strategy. And it's never too early to start. Invariably, I walk in to an institution, and their data's just not where they want it to be. I'm missing too many critical pieces of a profile because what used to not matter now ... I won't say critically, but now matters greatly to the cleanliness of that data conversion. And so that's one.
And it's never too early to start. If you feel like your data is not in the right place, it's never too ... In fact, it's better to start early than it is to have to rush it towards the end. So that data setup, I mean, do I have all the right pieces of information? Have I critically examined the impact of just previous decisions that I made on the core where it used to not matter that it might matter when I do the conversion?
So from an account ownership perspective. Not to get too deep in the weeds, but do I have all access to this account, deposit only, withdrawal only, those types of things? That starts to matter, and just to get your head around and get your fingers on right sizing, for lack of a better phrase, or just writing that data-ship is where I would go.
Second is who owns it? Assigning the owner for a particular piece of that conversion is absolutely ... There's this great old saying, "If everybody owns it, nobody owns it."
Cheryl Brown
Well, we're definitely looking forward to that. And Tim, thanks so much for joining me. Like I said, I hope I can have you on again soon.
Well, listeners, don't forget, you can hear more about M&A from the perspective of your banking peers in the April 29 webinar that's called The M&A Tech Conversion Playbook: Steps and Considerations to Shape Long-term Value. You can register for that at hub.q2.com/webinars, and I'll also share a link in the show notes.
But for now, that's it for another episode of The Purposeful Banker. As always, you can subscribe to the show wherever you listen to podcasts, including YouTube, Apple, and Spotify, and you can see our archive of podcasts at hub.q2.com/podcasts. Until next time, this is Cheryl Brown, and you've been listening to The Purposeful Banker.