A slow turning: Q4' 23 M&A trends in financial services

In 2023, the financial services (FS) industry experienced a decline in mergers and acquisitions (M&A) for the second consecutive year. Despite this downward trend, the 2024 outlook for the FS M&A landscape is generally optimistic. An anticipated improvement in the interest-rate environment should support deal-making across various FS subsectors. Additionally, private equity has seen an increase in its share of total FS volume. 

Within the three main FS subsectors—capital markets, banking, and insurance—expectations for 2024 M&A activity vary. Capital markets may rebound due to potential improvements in interest rates. Insurance continues to focus on strategic consolidation and transformative deals. Banking faces challenges from high interest rates, regulatory uncertainty, and presidential election concerns which could further dampen overall M&A activity. 

Generative artificial intelligence (AI) is also becoming a table-stakes capability in the M&A market, helping to evaluate potential acquisition targets and assessing how targets themselves use it. 

To learn more about the evolving M&A landscape in the financial services industry, the outlook for key subsectors, and the growing role of generative AI in deal-making, download our report.