There have always been two major ways to expand your business: Grow it, or Buy it. This brings up some interesting questions about which is more beneficial. The correct answer is usually based on cost of customer acquisition and customer lifetime value. Right now, with the cost of client acquisition being so high, companies are turning to buying distressed businesses. One, it eliminates competition, and two, the customers can be acquired "on sale". While mergers and acquisitions are common across all industries, there seems to be a significant propensity for growth by buying in the banking industry.
The unique problem that is causing an increase in the " buy them" thought process is that in banking their revenue generating power has dwindled with the decline of interest rates. Not only that but as clients leave for competitors by natural attrition, there is a dire need for new customers. Buying seems to solve both of these.
While it may solve the issue of new customers at a reduced cost, how to transfer the old customer base to the new bank has always been a major problem. First, you have a bevy of new customers who have not gone through your buying process. You have no idea who they are and why they are in the product they are in. Secondly, you can fix problem number one by keeping the staff from the bought bank, but they're not sure if the customers are in the correct products anymore either because they don't know what products they have to sell.