November 09, 2021 | Blog
By Suzy Bibko, Content Marketing Manager, EMEA
COVID became a justifiable pretext for companies and investors across industries to maintain business operations in a new remote environment. Strong technological competency facilitated conducting deals remotely. Now, as business gets back to usual, will the new normal include a robust use of technology? For dealmaking, has technology changed the way M&A professionals operate? These are important questions in Central and Eastern Europe (CEE), as the region has enjoyed a strong rebound in the first nine months of 2021 and looks set for further momentum going forward.
At our recent webinar in partnership with Mergermarket, experts from the legal, financial, and advisory sectors shared their thoughts on how technology can be used to gain a competitive advantage and how Polish companies are adopting tech for successful outcomes.
Technology boosts transactional momentum
During the lockdowns, trade may have stopped but M&A did not. Statistics show that globally, M&A activity increased even when trade was facing the problem of delivery despite demand.
Technology helped to regain transactional momentum after the original shock of lockdowns as transactions were done from homes. Deal activity did not stop; rather, with tech facilitating remote connectivity and processes, M&A activity reached record levels.
The other visible change is that investment banks are increasingly using technology for compliance, especially in onboarding clients. Technology has also helped in the development of creating dossiers of clients complete with a list of sanctions, a job that is highly repetitive. Thus, security and efficiency have been big drivers of technological adoption.
Automated deal flow
CRM tools are more in demand for portfolio management to manage pipelines and deal flow, and simple systems like Excel are no longer enough. Automation of processes, including analysis, makes things more efficient and quicker and has led to enhancement of the M&A lifecycle.
Admittedly, some technology trends, like e-commerce and online working, were present before COVID, they were too slow to be visible. The pandemic gave them a boost and has brought technology and its benefits into sharper focus.
Approach to technology
How dealmakers and firms approach technology is often based on the size of the transaction, as well as other factors.
But COVID has shown that dealmakers are open to the idea of using tech tools for more than just information gathering. In order to achieve efficiencies across the entire project lifecycle, technology provides more than just the sharing of information.
One cannot still just push a button and expect due diligence to be done, but technology is trying to automate a lot of M&A processes along the entire project lifecycle.
Investment banking is a sector where it can be difficult to adopt standardized tech solutions. It’s an industry that is proud of delivering a very high quality and tailored product, which relies on interaction with a client; this is hard to replace with technology. The same goes for investment decisions that need to be made by humans.
Similarly, smart contracts work fairly well for small and standardized transactions. But standardization of work is not always possible for complex M&A processes. However, it can make the process more efficient and secure, so dealmakers can spend more time on higher-value tasks.
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