In its $3.5 billion acquisition of Investors Bancorp that was announced yesterday, Citizens Financial Group said it sees greater market penetration in the Northeast.

Citizens will also see a notable technology integration project, according to an analysis by Bank Automation News of the banks’ tech stacks via FI Navigator.

Citizens has $185 billion of assets while Investors Bancorp has $25 billion of assets.

Only around half of the technology systems used by the banks overlap. Notably, Citizens and Investors are on different core banking systems; Citizens is on the FIS Systematics system and Investors is on Fiserv’s DNA.

If that wasn’t enough, the banks also use different technology providers for retail mobile banking apps, commercial loan originations (LOS), mortgage servicing and remote deposit capture, among other technologies. Citizens has a clear preference for a more diverse and “newer” vendor set, including Backbase for mobile banking and Black Knight for mortgage servicing. Investors, meanwhile, is more of a Fiserv bank, using the traditional technology vendor for remote deposit capture, online bill pay, credit card issuance, business online banking, and more.

But clearly, the core processing integration will assume the most bandwidth from the Citizens integration team. According to McKinsey, the consultancy, “it is common” for core banking projects to take two to three years to complete.

A “rip-and-replace” is not the only possible path to core banking transformation., according to McKinsey. Citizens could opt for “small tactical changes” that perhaps leave the Investors Fiserv core in place, or the bigger bank could even re-architect the Investors setup to allow for up to 10 years of life from its DNA core.

“Many banks have used these measures (popularly known as ‘hollowing out’) to extend the service life of their core banking system by many years, with a lot of success, and more importantly without slowing down their ‘digital’ journeys,” according to a McKinsey report published last year.

The Providence, RI-based Citizens did not specify its core banking integration strategy in its formal deal announcement. The bank said only that it had identified approximately $130 million of “fully phased-in annual cost savings,” after provisioning for additional investments in technology, as well as in brand marketing.

The transaction is expected to close by the end of the second quarter of 2022.