Mergers and acquisitions in financial services increased sizably in 2024 due to favorable macro-economic trends, but regulatory scrutiny created roadblocks for more M&A activity during the year.

“Every year since 2021 has been a down year,” Masaki Noda, managing director in the transactions and M&A advisory practice at consultancy Deloitte, told Bank Automation News. “But now, I would say, from probably mid-2024 the markets have started to turn, and we’ve seen more activity and more volume in the space.” 

Fintech M&A transactions increased 15% year over year to 101 in 2024, while banking M&A transactions increased 28% to 126, according to Deloitte’s 2025 banking and capital markets M&A outlook report, published April 4. 

High interest rates and market volatility aren’t favorable to M&A activity, Noda said, adding that when interest rates stabilized in 2024, M&A activity increased. 

“Now that rates have stabilized, there is volatility in the market and companies are sitting on the sidelines for M&A, waiting for the right opportunity to strike a deal,” he said. 

With a new presidential administration and M&A czar Lina Khan, the former chair of the Federal Trade Commission, leaving office on Jan. 20, the industry is hopeful for more M&A, Gunnar Millier, senior manager of advisory services, M&A and divestitures at Deloitte, told BAN. 

The “regulatory approval timeline was trending down under [former President Joe] Biden,” Millier said. With the new administration, “the market expectation is that you’re not going to have these 14-, 15-, 16-month regulatory approval processes like we saw in the early 2020s.” 

Crowded marketplaces 

The United States has more than 5,000 banks, the most per capita of any country, Millier said.  

Many banks acquire other banks to expand their reach and improve their efficiency ratios, Millier said, adding that when banks operate at scale, their fixed costs remain constant. 

In 2024, major banking and fintech M&As included: 

• Renasant Bank acquired The First Bank for $1.2 billion; 

• NCino acquired SaaS provider FullCircl for $135 million; 

• Grasshopper acquired Auto Club Trust for an undisclosed amount; 

• Snowflake acquired Neeva, Myst, TruEra AI and Sisu for an undisclosed amount; and 

• Visa acquired fraud fighting company Featurespace for an undisclosed amount. 

Capital One’s $35 billion acquisition of Discover, announced in February 2024, was approved by regulators last week. 

Role of private markets  

The fintech space is also crowded and private equity and credit markets are looking to fund M&A deals, Millier said. 

“We’re seeing upticks in early-stage debt and equity financing for fintech,” he said. With the rise of private markets, companies are less concerned about going to public markets for financing. 

“That’s a good alternative for them to get investments” without the regulatory scrutiny, Millier said. “If you look at like trends over [the] last like 10 to 20 years, you’ll see the actual number of public companies is actually declining and private equity/credit has been booming.” 

Private markets are also sitting on cash reserves that might be deployed for M&A as markets and the economy stabilize, Millier added.