Banks are always looking to scale up their operations and widen their market, just like any other business. Most banks across the world, including the UAE, prefer taking the consolidation route i.e. merging operations with another bank to achieve these objectives.
In fact, UAE witnessed a major merger just last year with First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD) joining hands to form the First Abu Dhabi Bank or FAB – one of Middle East’s biggest banks. Similar mergers and acquisitions are in the pipeline. But from the customers’ standpoint, the news of a bank merger can be both unsettling and confusing.
Since a merger has a direct effect on the bank’s daily functioning, customers are the first ones to feel the impact. But there’s no need to panic and take a hasty decision. All you need to do is prepare for a slightly bumpy road and pay attention to the latest communication from the bank for a smooth transition. Let’s first understand how different life would be after the merger.
What does the merger mean for you?
During acquisitions, your bank will be undergoing several modifications. You may find some branches being shut down, and new ones opening up. Saving account rates and bank fees may increase or decrease. And of course, you will have to get used to the new branding. However, most of the existing agreements will stay as agreed upon initially. If you have any active loans and deposits with the bank, there is no need to worry about changes in bank fees or interest rates.
One thing that may worry you is the closure of a nearby branch. But that is something you can live without, especially if you are getting a wider bouquet of products and services in exchange. Bank mergers usually lead to better product offerings and an improved digital banking experience, something that a majority of the customers prefer over branch proximity. Moreover, the benefits of lower costs can be passed on to the customers in the form of reduced fee or card-linked offers and discounts.
Watch out for the latest updates
The transition period can be a bit bumpy and you may even find your bank closing down its operations for a day or two. But there is no need to panic. Top banks understand the value of retaining their customers and will keep you updated on the changes through emails or text messages. Make sure you keep in regular touch bank yourself. In case you find that any product/service you are using is being discontinued, ask for a similar one in exchange. The bank may either offer you a similar product in return or possibly a discount.
Bank mergers are usually smooth since it’s in the interest of the bank to minimize the impact on customers. However, you must be prepared for any eventuality, even if it’s just for a month. Here are some things you can do:
- Disable direct deposit temporarily and request your employer to pay in cheques
- Re-route your bill payments to a separate bank account
- Keep extra cash on hand in case your debit card gets temporarily non-functional
- Find out when the bank will close down its regular/online operations and settle all your monthly bills/payments in advance
- Download a copy of your financial records and account history in case the database gets compromised or corrupted
Banks never want to lose their customers, especially during the transition period as that will defeat the entire purpose of the exercise. While you may find the transition period slightly unsettling, most of the products and services will remain the same. Still, if you find something that is not per your wishes, you can always lodge a complaint with your bank. Chances are that you will walk out with a decent deal or the bank will meet you midway to address your concerns.