European financial services leaders expect dealmaking to rebound into 2024 – EY CEO Outlook Pulse Survey

• Overwhelming majority (94%) of European financial services CEOs anticipate M&A, divestment, and strategic alliance activity over the next 12 months
• Nearly three-quarters (71%) of CEOs surveyed say AI is embedded in their transaction strategy processes, with just 5% have no plans to incorporate AI

Dealmaking is currently a top priority for CEOs across Europe’s financial services sector, according to the latest  EY CEO Outlook Pulse Survey, which found 94% of respondents expect to actively pursue strategic transaction activity over the next 12 months.

The July edition of the pulse survey, which canvassed the views of 96 European financial services CEOs on their strategic plans, headline concerns and investment intentions, found that of the 94% of respondents who foresee strategic transactions in the coming year, 64% are looking to divest, 64% are looking to enter strategic alliances or joint ventures, and 56% are looking at M&A.

Drivers of M&A activity

Improving tech capabilities is the primary driver of M&A, followed by the need to bring in new skills and expand into new geographies.

CEOs are incorporating AI into their M&A strategies, leveraging the technology within target selection and due diligence processes. Nearly three-quarters (71%) of CEOs surveyed are using AI as part of the transaction strategy process, either significantly or through pilot programs. Only a small group (5%) claim they have no plans to use AI.

Benoit Gérard, EY EMEIA Financial Services Strategy & Transactions Leader, comments: “Market sentiment is picking up across Europe’s financial sector following a turbulent first six months of the year, but the current economic and geopolitical outlook continues to drive caution. While this is impacting operating and investment strategies in the short-term, strategic dealmaking continues to provide an answer for many firms looking for growth and economies of scale, or to refocus and simplify.

“There is a critical advantage in bringing AI more comprehensively into the transaction process to surface new opportunities, increase efficiencies and manage time constrains. The financial sector remains in the experimental phase and is still only scraping the surface of the possible – firms that fully embrace the technology will ultimately gain the most in a competitive market.”

About the EY 2023 Global CEO Outlook Pulse

The EY 2023 Global CEO Outlook Pulse Survey aims to provide valuable insights on the main trends and developments impacting the world’s leading companies as well as business leaders’ expectations for future growth and long-term value creation.

It is a regular pulse survey of CEOs from large companies around the world conducted by FT Longitude, the specialist research and content marketing division of the Financial Times Group.

In June and July 2023, FT Longitude surveyed on behalf of the global EY organization a panel of 1,200 CEOs across Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway, Sweden, the United Kingdom, Australia, China, India, Japan, Singapore, and South Korea. Respondents represented the following industries: advanced manufacturing and mobility; consumer products and retail; energy and resources; financial services; health sciences and wellness; and technology, media and telecoms.

• Surveyed companies’ annual global revenues were as follows: less than US$500m (20%), US$500m–US$999.9m (20%), US$1b–US$4.9b (30%) and greater than US$5b (30%)
• The CEO Imperative Series provides critical answers and actions to help CEOs reframe their organization’s future. For more insights in this series, visit ey.com/en_gl/ceo