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The Demise of Union Bank

By David John Akpan

I have read so many commentaries and reactions to the acquisition of Union Bank by Titan Trust Bank (TTB), most of which I consider not just sentimental but naive.

Let me start by saying that every happening in our country should not be given political coloration, even if it is true that the government or governments in power are not performing. We should criticize the government, including this APC government and demand accountability, but lets conciously avoid the temptation of viewing every issue through political prisms.

Mergers and Acquisitions are global issues and strictly business decisions whose dynamics go beyond company’s age or assets size. Some of us who are a bit older witnessed Standard Trust Bank in 2005 acquire UBA. If you do a bit of research you will be amazed of the ‘David-Goliath’ chasm that existed between the 2 companies even at that time.

What I am saying is that such transaction is not just a Nigerian thing. Netflix, an American company founded by Reed Hastings and Marc Randolph was just a new player in the entertainment industry, yet acquired Blockbuster in a deal that stunned the entire world and has become a global case study in Executive Business programs till today.

Today’s business world, is called ‘VUCA’; meaning V- Volatile, U-Uncertain, C-Complex/Competitive and A-Ambiguous. Unfortunately in a VUCA world, age and size are no longer a source of competitive advantage. The greatest competitive advantage now is the ability to adapt to the digital and technology disruption. It is called Digital Innovation; It means ‘Agility’ or ‘Nimbleness’. So you either innovate or you die.

To be fair, our dear Union Bank had shown some resilience in digital innovation in the past few years and under the current management, considering their history. However, the body language of stakeholders still shows an unholly attachment to the ‘Big, Strong, Reliable’ mantra.

About 3 years ago, I walked into one of thier branches in Lagos to pay some bills. Fantastic ambiance, I must say and maybe some improvement in staff attitude and their processes. But what struck me, and very conspicuously was that I was about the youngest of about 15 customers in the massive banking hall. You can guess my age.

So in terms of customer base, there probably wasn’t a deliberate demographic transitioning toward the millennials or Gen Zs. The implication is that their customer base is still dorminated by Digital immigrants as against Digital Natives(young people who are digitallly savvy). With such polarization, especially in a ‘Click Economy’ that oùrs has become (an economy where transactions are consumeted by the click of buttons on tech devices), the question will move from whether the business will die, to when it will die.

Again, Union Bank may have adapted, but at what speed?The speed at which an organization innovates matters as well. When the rate of change or disruption in an industry is faster than the speed at which an organization adapts/innovates, death, acquisition or bankruptcy become imminent.This is called Digital Darwinism. Exactly what happened to Kodak.

Like Union Bank, Blockbuster or Kodak, if you are in business and you refuse to innovate or you are working for an organization, yet you refuse to acquire digital skills that will keep you relevant, your business or job is under serious threat. I advise that you take urgent steps in order not to become the next victim of Digital Darwinism.

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