The global financial services sector is undergoing a major transformation, with the drive for increased scale and the growth of private credit being the main forces behind mergers and acquisitions (M&A), according to Christopher Sur, Global Financial Services Deals Leader, PwC Germany.
According to the latest industry outlook from PwC, dealmakers are moving beyond the cautious sentiment of previous years to embrace a “generational shift” in how capital is deployed and managed.
This resurgence is characterised by a strategic focus on cost efficiency and technological reinvention, as institutions seek to insulate themselves from persistent competition and shifting regulatory demands.
The rise of private credit, which has grown very rapidly in the past decade to become a $2 trillion-plus asset class, is disrupting traditional market norms and driving a unique convergence between banking, insurance, and asset management.
PwC expects M&A activity in 2026 across the financial services sectors to be driven by the following trends:
Banks continue to consolidate both within domestic and regional markets, focusing on core businesses, and acquiring insurers and asset managers or partnering with private credit funds. Payment providers remain attractive for M&A.
Insurers are reshaping their portfolios, dropping low-return lines, and prioritising pensions and new digital models. Investment management separation from risk carriers is set to continue. Investor interest in insurance brokerage rollups persists, though growth is slowing in the US and UK as the strategy expands to new markets, including Asia.
Asset and wealth management (AWM) are seeing an uptick in mergers among mid-tier firms looking to improve efficiency, expand distribution, and enhance access to private markets.
AWM is also projected to see its highest rate of turnover in decades. PwC anticipates that nearly 16% of existing AWM organisations will be acquired or exit the market by 2027.
PwC is also seeing significant regional variance in deal activity. Asia is showing signs of renewed growth, especially in China, India, and Japan. Similarly, the US is seeing key themes like regional bank consolidation and recapitalisation.
In contrast, Europe’s rebound is more selective, primarily concentrated in Italy and the Nordic countries.
Recent significant deals highlight this trend, including Fifth Third Bancorp’s $10.9 billion acquisition of Comerica and the $7.4 billion take-private of Air Lease Corporation, which was spearheaded by a consortium including Sumitomo Corporation, SMBC Aviation Capital, Apollo, and Brookfield.
2025 saw an uptick in deals above $1 billion and megadeals over $5 billion; this momentum is expected to continue in 2026.
“The continuing megadeals in financial services are a reflection of the need for scale and tech-driven transformation, as well as an increasingly positive sentiment towards M&A,” said Sur.
Adding: “For 2026, we expect this trend to continue with a steady progression of deals, especially megadeals, depending on how geopolitics and the impacts around asset quality play out.”
The report also noted that technology, specifically the evolution from experimental artificial intelligence (AI) to “agentic” AI, has become a central pillar of deal rationale.
Roughly one-third of the largest corporate transactions now cite AI and digital transformation as key strategic motivators.
Rather than seeking simple efficiency gains, firms are acquiring fintech capabilities to re-architect core business processes – from automated underwriting in insurance to hyper-personalised wealth management.
This tech-driven transformation is creating a “K-shaped” recovery in dealmaking, where high-quality, tech-enabled assets command premium valuations while legacy players struggle to find suitors.
