When 2025 began, many observers – including Banking Dive – had “regulatory overhaul” and “M&A frenzy” on their annual bingo cards. 

Those came true. Roughly 181 U.S. bank deals were announced last year – about a 45% increase over 2024, according to S&P Global Market Intelligence. 

The shift inside regulatory agencies may have been more dramatic than first imagined (see, CFPB).

2026 may show how far last year’s changes can carry the banking space. Dozens of leading banks pushed ahead with artificial intelligence adoption in 2025. 

Alexandra Mousavizadeh, co-CEO of Evident Insights, said she expects leading banks will see some return on AI investment this year. 

Some of that may be in increased productivity. Or optimizing staff. JPMorgan Chase, for example, said it would use AI in place of proxy advisers.

But AI is just one area where Banking Dive anticipates new developments in the upcoming year. Below are a few others.

M&A

Regional banks like Huntington and PNC dominated the M&A landscape last year as they sought greater scale to take on the nation’s biggest lenders.

The dealmaking gold rush is expected to continue in 2026, but the pool of buyers for smaller banks may shrink, analysts said.

That’s because the midsize lenders that could have scooped up smaller competitors have become acquisition targets themselves.

Cadence Bank, for example, bought six Texas community banks last year before being acquired by Huntington. That power shift removed $53 billion-asset Cadence from the list of potential buyers, said Kirk Hovde, managing principal and head of investment banking at Hovde Group.

Consolidation has smaller banks – faced with succession issues and mounting tech costs – wondering if they should sell before their “buyer universe disappears or changes drastically,” Hovde said. 

CEOs like PNC’s Bill Demchak have bemoaned that every bank is a buyer. But lenders in smaller or less coveted markets may see a dearth of acquirers. That puts pressure on the active buyers that are looking, and may force a greater number of small lenders to merge, said Tom Hayes, managing director and head of depositories investment banking at D.A. Davidson.

Brian Graham, co-founder and partner at financial services advisory and investing firm Klaros Group, predicted 2026 could see double the roughly 181 deals last year did, given pent-up pressure from slower activity early in the decade.

Regional moves will continue, particularly among $10 billion- to $100 billion-asset banks, analysts said. But deals will cut across the size spectrum.

Greater confidence in regulatory approvals and a “dramatic” reduction in application lag time have made deals more attractive, Graham said. Banks are likely to act sooner than later, in case 2026 midterm elections – or the 2028 vote – send the political pendulum in another direction, analysts said.

Chartering

The 18 de novo charter applications filed with the Office of the Comptroller of the Currency in 2025 marked a “return to the norm” for the agency after years of regulatory dissuasion, according to agency chief Jonathan Gould. Further, the conditional approval of six of those applicants served as a harbinger of change.

Gould and Federal Deposit Insurance Corp. Chair Travis Hill have been vocal about their openness to the uptick, with Gould saying it “signals healthy competition, a commitment to innovation, and should be encouraging to all of us.”

The pro-charter tone at the top bodes well for newer applicants like fintech Mercury.

Michele Alt, Klaros Group co-founder, said she expects at least 25 de novo applications to be filed in 2026.

While many new applicants, including several digital asset firms, are seeking national trust charters, there are other options. Some firms, including Nissan and PayPal, opted to seek industrial loan company charters last year.

ILCs have historically been controversial. Opponents see them as a loophole allowing commercial and tech companies to access a bank charter without being subject to Federal Reserve supervision. Sens. Elizabeth Warren, D-MA, and Andy Kim, D-NJ, in October called for a moratorium on ILCs, saying they “undermine[] the separation of banking and commerce.”

But the FDIC’s Hill has touted the ILC charter as one way to boost the establishment of new banks.

“Who will apply, and what type of bank charter they will apply for, however, will be more interesting than just the number of applicants,” Alt said of upcoming entrants, citing the potential for more ILCs. “Now that PayPal has applied for an ILC, and with auto company ILC applications pending, we will see if other big tech or retail companies also file for ILCs.”

Law firm Freshfields, in a December blog post, noted that if 2025 “marked the reopening of the chartering door, 2026 is likely to test how wide regulators are prepared to leave it open – and how the traditional banking sector will respond.”

AI

AI tools double their capability roughly every 100 days, so it may make sense to look only at the last three months of AI-related advancements in banking. 

In that time, Wells Fargo, Truist and UBS appointed new execs to oversee AI development. Bank of America hyped the number of AI and machine-learning models it’s using. Citi stressed that it’s not the tech platform that’s crucial but rather how a bank gets its people to embrace AI. And Goldman Sachs wants to “completely reimagine” processes with AI.

“That doesn’t mean we will have less people,” Goldman CEO David Solomon said in October. “It means we have an opportunity to have more valuable people doing more valuable things to serve our clients and grow our franchise.”

Indeed, management consultant McKinsey & Co. estimated AI could drive up to 20% in net cost reductions for banks.

Mousavizadeh, of Evident Insights, said the “growing divide” on AI – between leading banks and lagging ones – is “getting bigger ever faster.”

“There’s still time to catch up,” she said. But “that window is closing.”

Some banks are showing a “hesitancy in hiring in anticipation of AI,” Mousavizadeh said, adding that executives may prefer to “wait and see if AI can do it.”

New AI-related jobs are springing up, though, Mousavizadeh said. "You need systems rethinkers, who can come and rewire," she said.

Other analysts see the human element in AI differently.

At the Money20/20 conference in Las Vegas in October, Greg Ulrich, chief AI and data officer at Mastercard, said he expects humans will remain in the loop with AI "for a little bit longer than we anticipate," because "you've got to keep training these things. 

“You need the reinforcement loops,” he said. “You need them to keep getting better."

Daragh Morrissey, global AI lead at Microsoft Worldwide Financial Services, said organizations that embrace AI most effectively “are doing it from the CEO down.”

“The CEO has become the chief AI officer," he said.

Regulation

At the nation’s financial regulators, the first year of President Donald Trump’s second term seemed dominated by the effort to get desired personnel in place. At no agency was that more on display than the Commodity Futures Trading Commission, where all Biden-era commissioners (even the Republican interim chief) voiced their intention to resign before the permanent figurehead was installed.

With agencies’ top positions secure, Year 2 can be about regulation. At the CFTC, that will likely mean in-depth forging of digital-asset policy.

The agencies best set up to advance policy appear to be the ones whose leaders began Year 1 effectively in place (FDIC) or had previous experience at the regulator when they took the reins (OCC). By 2025’s end, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. had made strides toward boosting the number of regulated banks – a stated goal at both.

At the Federal Reserve, the biggest question may be whom Trump will nominate as chair. But the central bank’s supervision leadership was never in question. Michelle Bowman led an effort in 2025 to demystify stress tests for banks, and appears poised this year to make headway on capital requirements standards – after an impasse foiled earlier, stricter proposals.

At the Consumer Financial Protection Bureau, Acting Director Russ Vought’s efforts to downsize the bureau – either by brute force or funding – have been consistently thwarted in court. And that’s not the only regulator whose fate may lie in the hands of the judiciary system.

The Supreme Court will hear oral arguments Jan. 21 in Trump’s attempted firing of Fed Gov. Lisa Cook. The case holds broad implications for the independence of the central bank. 

Also enmeshed in the legal system is Trump’s firing of the National Credit Union Administration’s two Democrats. The agency carries on with one board member. As does the CFTC. The Securities and Exchange Commission’s last Democratic commissioner left Jan. 2. The FDIC board has no minority-party representation. 

It remains to be seen whether the Trump administration will open itself to diversity of thought. 

“If we could return to the position of, ‘these truly are bipartisan commissions and all five votes really matter, and all five viewpoints are blended and harmonized,’ that would be a good outcome,” Scott Kimpel, a partner at Hunton Andrews Kurth and former counsel to an SEC commissioner, told Bloomberg Law. “I don’t think we are going to see that anytime soon.”