There are many reasons why credit unions merge. While some merge out of necessity, there is an increasing number of strategic mergers occurring Australia-wide.
Strategic mergers are those driven by maturity over necessity. In these instances, the purpose of joining forces with a compatible credit union is to achieve benefits such as leveraged economies of scale, membership base growth, access to new technologies, and to gain a competitive edge in the market.
This blog outlines a few considerations for credit unions thinking about a merger.
One of the most important steps during preparation is finding a suitable partner to merge with. Start by identifying potential merger candidates. While this can feel like a daunting task, work with your leadership team to identify a set of key questions and criteria. When answered, these should paint a picture for how the candidates will benefit your credit union post-merger.
Example questions to ask include:
There are both quantitative and qualitative measures that will help you answer the questions at hand. Quantitative measures include financial characteristics and economies of scale, whereas qualitative measures include potential member benefits and opportunities for product diversification.
Mergers are often highly complicated due to the dynamic nature of organisations and all their interdependencies. An integration plan should outline your approach to governance during the merger, as well as how and when key assets and resources will be combined.
Additionally, communication is an essential part of every successful credit union merger. Although both organisations are credit unions, there will be differences in the way they operate, interact with their customers, and run internal processes. Your integration plan should identify key personnel within both organisations who will support knowledge transfer and help their team members to understand any changes to their roles.
Software such as Holocentric Connect, Promapp, and Confluence, can help your credit union prepare for the change and equip employees with the knowledge they need.