The biggest banking deal since the financial crisis, CNBC's Jim Cramer said Friday of BB & T's pivotal $ 66 billion commitment to buy rival SunTrust Banks.
"I think technology – specifically, the need for customer relations management software – is a crucial part of what drove this deal," Cramer argued, pointing to what he saw as Bank of America's lead in the Digital banking arena
In its most recent quarter, Bank of America reported 36 million active digital banking users, versus 31 million three years ago The bank also said that 77 percent of its consumer deposits were digital, up from 67 percent three years ago 59003] "Right now, Bank of America is the king of mobile. They have an incredible app, and they have Salesforce to help them figure out their customers and when they want it, and they integrate it together, "Cramer explained." That's why Bank of America has such strong account openings [and] such big deposit growth, because people want to bank on the app, not [at] the brick-and-mortar branches – these have become expenses, not investments. "
And the people opening accounts at Bank of America are just tech-savvy millennials, Cramer said, they are transferring from other banks, called "Mad Money" called "the best kind" of customer acquisition.
"I think this SunTrust BB & T deal may be more about playing digital defense than offense, "he said." It's about giving the company the scale to invest more in technology, and less in brick-and-mortar, in order to keep those clients happy in a digital world and get some new clients – Keep Them From Migration to Bank of America 59003] The problem? Wall Street is choosing to focus on traditional success metrics and turn a blind eye to the power of companies like Salesforce when it comes to cutting costs by upgrading tech, Cramer said.
"My conclusion? the banking business, you need to understand the technology that is transforming the industry. Otherwise you'll miss what's really going on, "he said. "These analysts don't get the digital imperative, and that's the force behind, I think, what's happening with this transaction."
BB & T's stock traded lower on Wednesday a share by day's end. SunTrust's stock is roughly 0.54 percent, closing at $ 64.37 a share. Their all-stock deal, which will create the country's sixth-largest bank, is expected to close later this year and will probably undergo a series of regulatory hurdles for federal approval.