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.
The Framework: Thesis, Evidence, Implication
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).
The Eight Trends You Must Know
Be prepared to discuss at least three of these eight trends with the thesis-evidence-implication structure; depth on two or three beats surface awareness of all eight. Whichever you pick, the "so what?" is the most important part of your answer, so prepare one advisory implication per trend:
| Trend | Advisory implication |
|---|---|
| Bank consolidation | Sell-side and buy-side M&A mandates |
| Insurance brokerage | PE exits and strategic acquisitions |
| Private credit | GP-to-GP M&A and capital raises |
| Fintech maturation | IPOs and bank-fintech M&A |
| AI | Technology-motivated acquisitions |
| Interest rates | Deal timing and valuation |
| Regulatory shifts | Pent-up deals once uncertainty resolves |
| PE in financial services | Buy-side, sell-side and financing mandates |
1. Bank Consolidation
The US had 14,496 commercial banks in 1984; the FDIC now insures 4,238 institutions of all types. S&P Global counted more than 180 bank deals worth about $49 billion in 2025, including several billion-dollar regional mega-mergers. The drivers are structural: technology and compliance costs require scale, and faster approvals make large deals executable.
Key talking point: "The consolidation wave is driven by a 'scale or perish' dynamic. Mid-tier banks ($10-50 billion in assets) cannot absorb technology costs alone and face deposit competition from money-center banks. The regulatory window is favorable, but it closes if the political environment shifts."
2. Insurance Brokerage Consolidation
OPTIS Partners counted 695 insurance agency deals in 2025, down 12% from 2024, with PE-backed and hybrid buyers making 73% of acquisitions. At the top, five mega-deals worth over $61 billion have reshaped the landscape: Aon-USI ($17 billion, agreed August 2026), Gallagher-AssuredPartners ($13.5 billion), Aon-NFP ($13.4 billion), Brown & Brown-Accession ($9.8 billion) and Marsh-McGriff ($7.75 billion).
- Multiple Arbitrage
Multiple arbitrage is the roll-up strategy of buying small companies at low EBITDA multiples and folding them into a platform valued at a higher multiple, creating value the moment each deal closes. It works only while the gap between entry and exit multiples stays wide.
Key talking point: "Insurance brokers are PE's favorite financial services asset: recurring revenue, 90%+ retention, capital-light models and fragmented ownership. But the roll-up arbitrage has narrowed: MarshBerry put the average upfront multiple for US agencies at 11.57x EBITDA at the end of Q2 2026 (14.22x for high performers), while the public brokers' forward multiple fell from 13.9x to 12.3x between year-end 2025 and March 2026. Advisory work shifts toward platform exits to strategic buyers."
3. Private Credit Boom
Global private credit AUM reached $4.1 trillion at the end of 2025, per the Alternative Credit Council, and traditional asset managers are buying in. BlackRock committed about $28 billion across GIP, HPS (about $12 billion, per BlackRock's announcement) and Preqin to build a public-private platform. In 2026 came the first real test: non-traded BDCs received about $13.9 billion of first-quarter redemption requests, and some of the largest funds met only part of that demand.
Key talking point: "Private credit is reshaping asset management M&A because the fee gap is enormous: 150-200 basis points versus 10-40 for traditional strategies, which drives GP-to-GP deals. The 2026 redemption wave did not kill that thesis, but it changed pricing: buyers now pay for durable capital and diligence the loan book rather than paying for wealth channel growth."
4. Fintech Maturation
The 2025 fintech IPO wave (Chime at $11.6 billion, Klarna at $15.1 billion, Circle at about $6.2 billion) reopened the public market, but all three priced well below their 2021 private valuations, reflecting the re-rating from growth to profitability multiples. In 2026 the story became consolidation: Global Payments closed its $24.25 billion Worldpay purchase in January, and Capital One completed its Brex acquisition (agreed at $5.15 billion) in April.
Key talking point: "Fintech is moving from 'disruption narrative' to 'regulated financial institution.' Stripe's Bridge won conditional OCC approval for a national trust bank and Chime listed as a neobank, so fintech increasingly belongs in FIG coverage, not technology. Deal flow is both strategic (banks buying fintech for distribution and technology) and consolidation among fintech platforms."
5. AI in Financial Services
Generative AI is in production at major banks: JPMorgan's LLM Suite is available to about 250,000 employees, half of whom use it daily, and banks are moving to agentic AI that runs multistep workflows. In 2026 AI also became a valuation question: on February 9, fears around a ChatGPT insurance comparison app sent WTW down 12% in a day, its worst session since 2008.
Key talking point: "AI is a deal driver, not just a technology trend. Mid-tier banks cannot match money-center AI budgets, which creates 'scale or get acquired' urgency. AI now moves multiples too: investors discount intermediaries whose value is access or comparison. For FIG bankers, AI also speeds up execution, from due diligence to document review."
6. Interest Rate Environment
Industry-wide NIM reached 3.39% in Q4 2025, the highest level since 2019, and held at 3.32% in Q2 2026. Margins widened because funding costs fell faster than asset yields as deposits repriced downward. 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: "Strong NIMs are a tailwind for bank M&A because they lift acquirer earnings and improve the accretion math. But rate risk is a diligence priority after SVB: every bank M&A analysis now stress-tests the securities portfolio under different rate scenarios and checks uninsured deposit concentration."
7. Regulatory Shifts
The Basel III Endgame rule is still not final. The July 2023 proposal would have raised capital about 19% for the largest banks; the March 2026 reproposal would instead modestly reduce capital requirements for large banks. The EU adopted CRR3 in January 2025 and the UK goes live in January 2027, creating international fragmentation.
- Basel III Endgame
Basel III Endgame is the US name for the final package of post-2008 Basel capital reforms, which rewrites how large banks calculate risk-weighted assets for credit, market and operational risk. Because it sets the denominator of the CET1 ratio, it determines how much excess capital banks have for buybacks, growth and acquisitions.
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. A final rule in line with the reproposal would free excess capital and unlock deals that have been on hold."
8. PE in Financial Services
PE sponsors are simultaneously the most active buyers, sellers and clients in FIG. Echelon counted a record 466 RIA transactions in 2025, up 27%, with financial sponsors or sponsor-backed RIA platforms involved in about three-quarters of them. In insurance, PE-built platforms exit to strategic buyers, as KKR is doing by selling USI to Aon.
Key talking point: "PE is a permanent structural feature of FIG, not a cyclical trend: recurring revenue, regulatory moats, aging founders and operational upside make financial services one of PE's most attractive sectors. Sponsors pay FIG advisory fees at every stage: buy-side when building platforms, sell-side when exiting, and capital markets for leveraged financing."
