Banker & Tradesman file photo
Tools meant to protect consumer accounts helped cause the high-profile problems People’s United Bank customers faced during M&T Bank’s system conversion last year.
In his annual letter to shareholders, René Jones, CEO of Buffalo-based M&T Bank, provided an assessment of the issues involved with the September 2022 conversion.
“In every merger we learn, often the proverbial hard way – but those lessons ultimately make the bank stronger, not just in our new markets, but everywhere,” Jones wrote in his lengthy annual letter. “Our merger with People’s United was no different. Candidly, we learned more than we cared to, at a cost to many of our customers and colleagues.”
While the deal to acquire People’s United Bank marked M&T Bank’s 25th merger since 1985 and its largest, Jones noted that this was the bank’s first merger where online and mobile banking featured prominently.
The bank’s most recent mergers in 2011 and 2015 involved online banking tools, Jones said, but these capabilities “weren’t woven into the fabric of everyday life to the extent they are today.”
“That notwithstanding, we ambitiously set out to ‘convert’ our new consumer and commercial customers to the M&T systems in such a way that they wouldn’t even notice the change,” Jones said. “For many that was the case, for others, not so much. In banking, there is no ‘A’ for effort.”
Jones said the bank had tried to eliminate inconveniences related to usernames, passwords and bill pay information that customers face when switching banks.
The bank’s behind-the-scenes security protections began on the first day of the conversion, he said, but they lacked the transaction history needed to distinguish normal behaviors from abnormal ones.
“In other words, we saw red flags when they weren’t really there,” Jones added.
Commercial customers also faced challenges tied to what Jones called a more robust suite of cash management services. M&T underestimated the training and resources needed to help customers learn the systems and products, Jones said, noting that the services were more complex than what business customers previously used with People’s United Bank.
Jones also noted the effects that the conversion issues had on employees, as customers turned to branches and especially the call center for assistance. He pointed out that the number of phone calls to the bank tested employees, exacerbating customers’ frustrations.
“That there are explanations for what has occurred is not to offer excuses, especially when weighed against the disruption felt by those impacted customers and the stress and embarrassment experienced by our front-line colleagues,” Jones said.
Jones said that M&T Bank understood the merger process put the trust customers and employee had in the bank at risk.
“Newcomers are always likely to be greeted skeptically and our start was not auspicious,” Jones said. “But we hope – and yes, trust – that the improvements we are making in our business practices coupled with a commitment to the communities where we do business will become manifest and reassure.”
