Mark Miller
Mark Miller is Associate Director of Insights for Payments with Mintel Comperemedia. He focuses on credit cards, lending products, and the general financial services landscape.

BB&T and SunTrust, the two largest regional banks in the South, have announced their intention to merge. The move represents by far the largest deal since the ‘financial crisis’ and would create the sixth largest retail bank in the US.

Smaller, regional banks are struggling to compete with giants like Chase, Bank of America and Wells Fargo (all of whom aggressively expanded during the last wave of acquisitions in 2008). Their market dominance, combined with a much more relaxed regulatory environment under the current administration, could open the door for more mergers & acquisitions (M&A) among smaller banks.

Technology creates a changing financial landscape

An even larger impetus for change may be coming from a different source – online banks. In their post-announcement statements, representatives from BB&T and SunTrust emphasized the need to advance their technological offerings to better meet the needs of a new generation of customers.

Chime, a no-fee online bank with a debit card, online banking and innovative features like automatic savings and the ability to receive a paycheck two days early, is reportedly attracting more new customers each month than some of the largest, traditional banks.

Representatives from BB&T and SunTrust emphasized the need to advance their technological offerings to better meet the needs of a new generation of customers.

Others have taken advantage of cost-savings from the lack of physical branches and a rising rate environment to offer savings annual percentage yield (APYs) hundreds of times higher than the industry norms. Recognizable names like Discover, Goldman Sachs, and Sofi as well as newcomers like Varo and Empower are actively promoting this value proposition to attract more customers to their platforms of banking services.

BB&T and SunTrust clearly see an opportunity to reduce costs, expand their customer base and invest the savings in the type of technology needed to stay relevant in this rapidly evolving banking space.

Currently, we know that the combined entity will be renamed, continuity in the leadership structure will be maintained and will be located in Charlotte, adding to the large banking presence established by Bank of America and Wells Fargo. We don’t yet know if the merger will result in expansion into new local markets, or how the move will impact the current operations in Winston-Salem and Atlanta, or the naming rights of the recently constructed Atlanta Braves ballpark.

What we think

We are eager to see how BB&T and SunTrust communicate the ongoing changes to existing customers and ultimately roll out the new brand. The media mix has evolved significantly during the past decade and maintaining trust remains critical for bank credibility. A transparent and authentic omnichannel marketing approach will be the key to a successful transition.