How to Discuss FIG Trends and Current Events

Introduction

"What trends are you following in financial services?" is a question that appears in virtually every FIG interview, and it tests something different from a deal discussion. Deal questions test depth on a specific transaction. Trend questions test breadth: do you read about financial services regularly, can you identify forces that drive FIG deal flow, and can you connect macro developments to specific advisory opportunities? The strongest candidates discuss trends not as abstract observations but as forces that create or constrain transactions. Every trend should lead to a "so what?" for a FIG banker.

Structure every trend response around three components, delivered in 30-45 seconds per trend.

Thesis: A clear, one-sentence view on the trend. Not hedged to the point of meaninglessness ("consolidation might happen"), but not overconfident either ("consolidation will definitely accelerate 50%"). State a directional view with appropriate qualification.

Evidence: Two to three specific facts, data points, or deal examples that ground your thesis. Use real numbers: deal values, market sizes, adoption rates, valuation multiples. Vague evidence ("there have been a lot of deals") signals you have not done the work.

Implication: What does this trend mean for FIG deal activity? This is the part most candidates miss. An interviewer does not want a market commentary; they want to know you can think like a banker. Every trend either creates advisory mandates (M&A, capital raises, restructuring) or constrains them (regulatory uncertainty, capital shortfalls, valuation compression).

You should be prepared to discuss at least three of these eight trends with the thesis-evidence-implication structure. Having depth on two to three is far more valuable than surface-level awareness of all eight.

1. Bank Consolidation

The US had 14,496 commercial banks in 1984; that number has fallen to approximately 4,336. The decline accelerated in 2025 with 179 deals, including multiple billion-dollar regional mega-mergers. The drivers are structural: technology and compliance costs require scale, new bank formation has nearly ceased (86 total new banks since 2010), and the regulatory posture under the current administration is the most permissive in years.

Key talking point: "The consolidation wave is driven by a 'scale or perish' dynamic. Mid-tier banks ($10-50 billion in assets) face technology costs they cannot absorb independently and deposit competition from money-center banks. The current regulatory window is favorable, but it closes if the political environment shifts."

2. Insurance Brokerage Consolidation

Insurance brokerage saw 695 M&A deals in 2025, with PE sponsors driving 73% of transaction volume. The four mega-deals (Gallagher-AssuredPartners at $13.5 billion, Aon-NFP at $13 billion, Brown & Brown-Accession at $9.8 billion, Marsh-McGriff at $7.75 billion) totaled over $44 billion and transformed the competitive landscape. The top five brokers now control approximately 52% of the market.

Key talking point: "Insurance brokers are PE's favorite financial services asset: recurring revenue, 90%+ retention rates, capital-light models, and fragmented ownership. The roll-up economics work because small agencies trade at 4-5x EBITDA while platforms are valued at 14-17x. The advisory opportunity spans PE exits, strategic add-ons, and capital raises for leveraged platforms."

3. Private Credit Boom

Global private credit AUM reached **$3.5 trillion** by year-end 2024, with capital deployment surging 78% to $593 billion. GP-to-GP deal values jumped 173% to $42.6 billion as traditional asset managers scrambled to acquire private credit capabilities. BlackRock committed $27.8 billion across three acquisitions (GIP, HPS, Preqin) to reposition toward a public-private hybrid platform.

Key talking point: "Private credit's growth is reshaping asset management M&A because the fee gap is enormous: 150-200 basis points for private credit versus 10-40 for traditional strategies. The advisory opportunity is in GP-to-GP transactions where traditional managers acquire private credit platforms at premium valuations. But the risk is that the market has not been tested through a real credit cycle, and recent stress signals (selective defaults outpacing conventional defaults 5:1) suggest the first test is approaching."

4. Fintech Maturation

The 2025 fintech IPO wave (Chime at $11.6 billion, Klarna at $15.1 billion, Circle at $6.2 billion initial valuation) reopened the public market pathway after a two-year drought. All three priced well below their 2021 private valuations, reflecting the permanent re-rating from growth multiples to profitability multiples. Fintech M&A reached $55.4 billion across 840 deals in 2025.

Key talking point: "Fintech is transitioning from 'disruption narrative' to 'regulated financial institution.' The convergence with traditional banking (Stripe filing for a bank charter, Chime going public as a neobank) means fintech increasingly belongs in FIG coverage, not technology. The deal flow is both strategic (banks acquiring fintech for distribution and technology) and consolidation (fintech platforms acquiring smaller specialists)."

5. AI in Financial Services

Generative AI is now in production deployment at major banks: JPMorgan's LLM Suite has 125,000 daily users, Goldman's GS AI Assistant cut deck preparation time by 50%, and 87% of financial institutions have deployed AI-powered fraud detection. The capital intensity of AI infrastructure is creating a "scale or get acquired" dynamic for mid-size institutions.

Key talking point: "AI is a deal driver, not just a technology trend. Mid-tier banks cannot afford the $300-500 million AI infrastructure investments that money-center banks are making. That creates M&A urgency: acquire a bank with AI capabilities or be acquired by one that has them. For FIG bankers, AI also affects deal execution directly, with AI tools accelerating due diligence, modeling, and document review."

6. Interest Rate Environment

Industry-wide NIM reached 3.39% in Q4 2025, the highest level since 2019. The steepening yield curve supports bank profitability as deposits reprice downward faster than loan yields adjust. However, the 2023 banking crisis demonstrated that rate movements create unrealized securities losses that can destroy institutions with concentrated, uninsured deposit bases.

Key talking point: "Rising NIMs are a tailwind for bank M&A because they make acquirer earnings look strong and improve the accretion math for deals. But interest rate risk is a diligence priority after SVB. Every bank M&A analysis now includes stress testing of the securities portfolio under different rate scenarios and evaluating uninsured deposit concentration."

7. Regulatory Shifts

The Basel III Endgame rule remains unfinalized, with a "roughly capital-neutral" reproposal expected by mid-2026. The original July 2023 proposal (19% capital increase for the largest banks) was cut to approximately 9% and may end up with no net capital increase under the current administration. The EU adopted CRR3 effective January 2025 and the UK PRA confirmed final rules going live January 2027, creating international fragmentation.

Key talking point: "Basel III Endgame is the biggest regulatory variable for FIG deal activity. Until banks know the final capital requirements, they cannot precisely calculate pro forma CET1 ratios for acquisitions. When the final rule drops, expect a wave of deals that have been on hold. The expected capital-neutral outcome is bullish for bank M&A capacity."

8. PE in Financial Services

PE investment in insurance reached $27 billion in the first seven months of 2024 alone (up 42% from all of 2023). PE-backed RIA platforms drove 89% of wealth management M&A in 2024, with 345 RIA transactions closing through Q3 2025 representing $1.22 trillion in assets. PE sponsors are simultaneously the most active buyers, sellers, and clients in FIG.

Key talking point: "PE is a permanent structural feature of FIG, not a cyclical trend. The combination of recurring revenue models, regulatory moats, aging founder demographics, and operational improvement opportunities makes financial services one of PE's most attractive sectors. For FIG bankers, PE sponsors generate advisory fees at every stage: buy-side when building platforms, sell-side when exiting, and capital markets for leveraged financing."