Financial institutions drive 2,000 M&A deals amidst tech pressure

But hidden liabilities could emerge after transactions close.

Global mergers and acquisitions activity is picking up in 2026, with financial institutions amongst the most active buyers as they respond to technology shifts, regulatory changes and margin pressure, according to WTW.

More than 2,000 deals were announced by financial institutions through most of 2025, signalling stronger confidence year on year. 

Although interest rates remain higher than levels seen over the past 25 years, borrowing costs have started to ease. 

Over the past year, central banks including the Federal Reserve and the European Central Bank have reduced rates, making acquisition financing more accessible.

Deal activity in financial services is being driven by the need for scale and stronger digital capabilities. 

Banks and insurers are acquiring fintech firms to expand into artificial intelligence, blockchain and embedded finance, whilst meeting demand for digital services. 

Some transactions, however, have been paused due to uncertainty linked to US tariff negotiations.

Consolidation is expected to continue through 2025 and beyond, as banks seek cost efficiencies and larger market share. 

Open banking developments and new payment infrastructure are also supporting dealmaking, alongside private equity firms with significant unallocated capital.

Post-deal integration remains a key risk. Transactions may fail to deliver expected synergies, with buyers at risk of overpaying or uncovering hidden liabilities such as cyber vulnerabilities and legal disputes. 

Insurance products are increasingly used to manage these exposures. 

Directors’ and officers’ liability and professional indemnity policies can protect executives and advisers against claims of misrepresentation or inadequate disclosure during a transaction.