KPMG Says Financial-Services M&A Gets More Selective in Q1 2026

Deal teams were more confident, but they did fewer transactions, and KPMG said the gap mattered more than it looked. In its May 7 financial-services M&A report, the firm said the first quarter of 2026 opened with that contradiction: buyers felt steadier, yet the market produced fewer completed deals and lower total value than the unusually strong fourth quarter of 2025.

For KPMG’s deal, risk and technology teams, the shift is not about a sleepy market. It is about a more selective one, where fewer transactions still bring heavy workload because the surviving deals are harder to win and harder to close. KPMG said the year-end surge in 2025 had been inflated by a handful of transformational transactions, so Q1 2026 looked softer once that effect faded. In practice, that means more scrutiny on every target, more rounds of diligence and more pressure to prove that a buyer can actually absorb the acquisition.

US banking made the point most clearly. KPMG said regulatory approval timelines continued to shorten, but that speed did not reduce complexity. Late-2025 federal review timelines for several large bank mergers fell to 49, 67, 88 and 95 days, a sharp acceleration that compresses the time available for integration planning. That shifts work earlier in the process, pulling in control design, data migration, operating-model analysis and regulatory readiness before a deal is even signed.

The latest activity numbers show why the work is getting more concentrated, not less. Ankura Consulting Group said US bank M&A in Q1 2026 totaled 33 announced transactions worth $15.7 billion, the largest first-quarter combined value since 2019, excluding the Capital One-Discover deal. It also said 53 bank deals were completed in the quarter, the highest total since Q4 2021. In that kind of market, a small number of large transactions can drive the headline value, which makes execution quality more important than raw volume.

The broader backdrop is a market split by strategy. Some banks are chasing scale, some are partnering with fintechs and some are consolidating to fund technology investment. PwC said global financial-services deal value rose 25% in 2025 even as volumes rose just 4%, underscoring how much larger deals are doing the heavy lifting. KPMG’s own global M&A outlook was based on 700 decision-makers across 20 countries and jurisdictions, and its message was similar: financial-services dealmaking is not disappearing, but it is becoming more disciplined.

That puts a premium on the kind of work KPMG professionals are asked to do under tight deadlines. Buyers now want sharper theses, cleaner execution and earlier answers on integration risk. A thinner market can still be labor-intensive, and for KPMG’s practitioners, the new pressure point is not deal count. It is whether each deal can survive a closer, faster and more unforgiving review.