Mergers and acquisitions (M&A) momentum continues to build across the broader financial services industry and once again influences executive agendas.
In the first half of 2026, publicly disclosed financial services deals in the United States and Canada rose 8% year over year following robust growth in 2025. The trend appears far from over, with industry estimates suggesting as many as 800 U.S. financial institutions could consolidate by 2028.
But an active market’s numbers don’t tell us which deals will create lasting value. When the deal market heats up, the bigger challenge is knowing which opportunities to walk away from, in my experience.
With more than two decades of experience advising on mergers and acquisitions and leading regulated financial institutions, I’ve learned that deals usually underdeliver because leaders underestimate what they’re buying.
5 things to consider before you buy into an M&A deal
Financial models and valuations matter. But increasingly, success depends on what happens after the M&A deal closes, including technology integration, governance, operating models, regulatory expectations, and organizational culture.
1. Start with the capability
The strongest acquirers understand one important distinction—they’re buying a company’s capabilities, which changes almost every decision that follows.
Leaders should go beyond market share, assets, or growth to ask: What capability does this acquisition provide that we cannot realistically build ourselves or access another way?
JPMorgan Chase’s acquisition of InstaMed in 2019 offers a useful example. JPMorgan already had tremendous scale in payments; InstaMed added a specialized healthcare payments platform connecting providers, payers, and consumers.
In my opinion, the strategic value was a capability in a complex vertical where payments, reconciliation, and customer experience were difficult to solve. That distinction between simply adding size and acquiring a capability is one leader should make before pursuing a deal.
Scale creates efficiency, but capability creates competitive advantage. Whether the answer is regulated infrastructure, product expertise, distribution, technology, or specialized talent, leaders should be able to describe that capability in one clear sentence. If they can’t, integration will likely expose that ambiguity later.
2. Underwrite the operating model
Of course, financial projections explain why a deal looks attractive. However, many executives realize that the operating model determines whether those projections ever become reality. Long before closing, leadership teams should understand how they’ll make post-integration decisions.
Dig hard into these questions:
- Who owns the customer?
- Who owns product decisions?
- How will risk be governed?
- How will incentives remain aligned after closing’s momentum fades?
Look at the merger of Daimler and Chrysler in 1998. The companies entered the combination with markedly different management structures, decision-making styles, and compensation practices. These differences became increasingly difficult to reconcile after the merger closed.
The anticipated synergies ultimately went unrealized, illustrating why questions about governance, accountability, and incentives need answers before integration begins. The questions executives don’t want to answer before closing often become the issues they spend the most time managing afterward.
3. Treat partnerships as a stress test
Many executives pursue M&A because a partnership didn’t work. “If collaboration is hard,” the thinking goes, “ownership will fix it.” In practice, if teams struggle to align incentives, governance, or execution in a partnership, an acquisition magnifies those issues, and M&A only internalizes complexity.
Strong partnerships often indicate M&A readiness. Failed ones are a signal to pause, diagnose execution gaps, and fix them before escalating commitment.
4. Look beyond the balance sheet
Acquirers should rigorously evaluate operational readiness alongside valuation. Outside financial statements, acquirers also inherit technology decisions, governance practices, regulatory obligations, and organizational habits built over many years. Legacy technology remains antiquated even after ownership changes. Likewise, operational complexity isn’t resolved with a change in legal ownership.
5. Understand that culture is structural
Leaders may treat culture as the soft side of integration, but cultural differences quickly become operational ones.
Too often I’ve seen one organization escalate problems early, while another handles them within the business line. One rewards individual performance; another emphasizes team results. One gives leaders autonomy; another relies on layers of approval.
These differences may seem manageable before closing, but during execution they can slow decisions, blur accountability and undermine the value the deal was meant to create.
Disciplined buyers create value
When deal activity increases, opportunities can feel abundant. Each authentic opportunity moves the organization closer to the company it ultimately wants to become. The most successful acquisitions don’t simply add scale. They strengthen capability. They improve execution and reinforce strategy.
In an active M&A market, disciplined leaders clearly understand what they’re buying and what it takes to make that acquisition successful.