Management Strategies

10:41 AM
Cynthia Ramsaran
Cynthia Ramsaran
News
Connect Directly
RSS
E-Mail
50%
50%

Conversion Invasion

The merger between JPMorgan Chase and Bank One will involve conversions, not integrations.

When it comes to M&A in banking, integration's 'out' and conversion's 'in,' according to Susan Landry, vice president and research director, Gartner, Inc. (Stamford, Conn.)

That should become evident during the technology transfer between JPMorgan Chase and Bank One. "My guess -- and we're all guessing at this point -- is that the technical strategy would be less about merging those two things together and more about conversion," says Landry. "This is true of almost every bank merger."

J.P. Morgan Chase's strengths lie in "global services for corporations," while Bank One focuses primarily on retail banking, according to Landry.

Furthermore, the two banks have had vastly different technology strategies. "Bank One has been engaged in bringing as much as they could back in-house so that they could have direct control over service and have greater control over the cost," she says. "Chase, on the other hand, was actively engaged in and had one of the biggest IT outsourcing deals with IBM."

Landry said that the merger will likely involve moving customers over to a single technology platform, rather than attempts at integration. For example, it would make sense to move J.P. Morgan Chase's retail banking customers onto Bank One's retail platform.

"Everyone talks about 'integration'," says Landry. "In fact, there is very little technological integrating that occurs, not to say that there isn't a huge technical task."

"The technologies are integrated but it is much more about converting customers from one type of technology to another," she adds.

Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.