Christopher Sur, global financial services transaction leader at PwC Germany, said the global financial services industry is undergoing a major transformation, with scale expansion and private credit growth becoming the main forces behind mergers and acquisitions (M&A).
Dealmakers are shaking off the caution of previous years and embracing a “generational shift” in how capital is deployed and managed, according to PwC’s latest industry outlook.
This recovery has been characterized by a strategic focus on cost efficiencies and technological innovation as institutions seek to insulate themselves from continued competition and changing regulatory requirements.
The rise of private credit, which has grown rapidly over the past decade to become an asset class worth more than $2 trillion, is disrupting traditional market norms and driving a unique convergence between banking, insurance and asset management.
PwC expects M&A activity in the financial services industry to be driven by the following trends in 2026:
Banks continue to consolidate in domestic and regional markets, focusing on core businesses, acquiring insurance companies and asset managers or partnering with private credit funds. Payment providers remain attractive for M&A.
Insurers are reshaping their investment portfolios, abandoning low-return product lines and prioritizing pensions and new digital models. The separation of investment management and risk takers will continue. Investor interest in insurance brokerage mergers remains, although growth is slowing in the United States and the United Kingdom as strategies expand into new markets, including Asia.
Asset and wealth management (AWM) Mid-market players have seen an increase in M&A activity to improve efficiency, expand distribution and enhance access to private markets.
AWM’s turnover is also expected to reach its highest level in decades. PwC predicts that by 2027, nearly 16% of existing AWM organizations will be acquired or exit the market.
PwC also found significant regional differences in deal activity. Asia is showing signs of renewed growth, particularly in China, India and Japan. Likewise, the United States is seeing key themes such as regional bank consolidation and recapitalization.
In contrast, Europe’s rebound has been more selective, concentrated mainly in Italy and Nordic countries.
Recent major transactions highlight this trend, including Fifth Third Bancorp’s $10.9 billion acquisition of Comerica and the $7.4 billion privatization of Air Lease Corporation (led by a consortium including Sumitomo Corporation, SMBC Aviation Capital, Apollo and Brookfield).
There will be an increase in deals exceeding $1 billion in 2025, with large deals exceeding $5 billion; this momentum is expected to continue in 2026.
“Continued large-scale transactions in financial services reflect the need for scale and technology-driven transformation, as well as increasingly positive sentiment towards M&A,” Suhr said.
Adding: “Into 2026, we expect this trend to continue, with deals, especially large ones, moving forward steadily, depending on how geopolitical and asset quality impacts play out.”
The report also noted that technology, particularly the evolution from experimental artificial intelligence (AI) to “agent” AI, has become a core pillar of the deal rationale.
Roughly one-third of the largest corporate deals currently identify AI and digital transformation as key strategic enablers.
Companies no longer seek simple efficiency gains but are acquiring fintech capabilities to reimagine core business processes—from automated underwriting of insurance to hyper-personalized wealth management.
This technology-driven transformation is creating a “K-shaped” recovery in the trading space, with high-quality, technology-enabled assets commanding premium valuations while legacy players struggle to find suitors.
