A transformational shift is reshaping the investment banking landscape, as banks balance a multitude of factors including bubbling deal volume, complex macroeconomic headwinds, and evolving AI advancements.
While recent geopolitical events, mixed economic signals, and AI-led disruption are top-of-mind, experts believe the outlook still remains optimistic for expansive deal activity for the year.
In this article, we leverage exclusive analyst insights and market intelligence from the AlphaSense platform to conduct a deep dive on the relevant trends shaping the investment banking landscape in 2026.
Robust Enterprise AI Integration
Increasingly, banks are shifting from experimental AI to robust integration, embedding agentic use cases across foundational processes to drive efficiency, according to research sourced from AlphaSense.
Some experts believe AI is automating manual tasks traditionally performed by junior associates and interns (such as pitch book prep and data entry) and condensing the time required for these roles. Other experts acknowledge the time reallocation, empowering junior analysts to work on more strategic projects and pushing them up the “workstream of opportunity.”
Additionally, banks are leveraging AI for digital innovation and operational modernization. For example, Goldman Sachs announced a partnership with Anthropic to build ‘digital co-workers’ using Claude to automate trade accounting and client onboarding. TD Securities is investing in AI infrastructure to modernize its core business processes and risk frameworks to optimize regulatory responsiveness and automation.
Related Reading: Top AI Use Cases in Investment Banking
Elevated Deal Projections and PE Exits
Major investment banks expect record or near-record M&A pipelines for the year, with some management teams anticipating a "top decile" year for volumes. Research indicates that as of mid-March, M&A volume is up 52% year-over-year, including a massive spike in sponsor exits that are triple the volume seen in Q1 2025. Large and mega-deals (between $5-$10 billion) are leading deal momentum with an overall diversified pipeline.
While tech remains a major driver of exit value, some investors are monitoring potential headwinds in software due to valuation ‘deterioration.’ As a result, pipelines in tech-exempt software and other sectors remain strong.
IPO momentum is expected to continue fueling capital markets activity, with Q1 2026 volumes approximately double those of the previous year. Beyond tech debuts (which have struggled in part due to shifting valuations and weakened sentiment in the early part of the year), investors have their eye on biotech, following a surge in early February during which four drugmakers went public and raised nearly $1 billion.
“Stagflation” Risks
Volatile geopolitical events and ongoing macroeconomic headwinds stand to thwart IB activity for the year, in particular due to events in the Middle East and mixed signals on interest rates, inflation, and labor data.
According to broker research, if oil prices remain above $100 per barrel for an extended period, growth risks for the broader economy and investment banking volumes will likely increase. Additionally, concerns exist that proposed regulation on housing affordability and accessibility as well as credit card rate caps could hurt bank profitability in certain segments.
One analyst believes a war in Iran could derail current revenue momentum, potentially weighing on loan demand even if volatility initially sparks trading activity.
A Generative Search prompt on geopolitical volatility and macroeconomic headwinds in AlphaSense generates a summary of prevailing indicators
Persistent Deregulation
According to industry experts, the current U.S. administration’s pro-business stance and appointees with deep finance experience are expected to further fuel capital markets activity through less restrictive regulation.
A shifting regulatory landscape is unlocking capital productivity through Basel III Endgame and G-SIB reforms that will reduce capital requirements for the largest U.S. banks, freeing up buyback capital or expansion opportunities.
The timeline for approving bank mergers has decreased to under four months under the present administration, down from 12-16 months under the previous administration, promoting M&A approval efficiency within the sector.
Rise of Secondaries
Explosive global secondaries growth continues to be a relevant force in IB, with volume estimates ranging from $130 billion to over $200 billion in 2026, with both boutique and bulge bracket banks competing within the space.
According to broker research, banks are aggressively building out secondaries advisory teams, creating a ‘flywheel effect’ that enhances their stake in the broader sponsor-backed M&A ecosystem. Analysts note that by advising GPs on continuation funds, banks gain exclusive knowledge of portfolio companies likely to be sold in the future, providing a "proprietary pipeline" of M&A targets. Involvement in secondaries also offers access to unique datasets on private market valuations and investor appetite, which enhances M&A pitch books and client insights.
Investment banks are prioritizing the buildout of ‘hybrid capabilities’ to bridge the gap between public and private markets, focusing on originating private credit alongside sponsors, structuring continuation vehicles, and providing secondary liquidity.
Navigate the Evolving Investment Banking Landscape
With AlphaSense’s comprehensive proprietary content universe and custom end-to-end workflows, investment banking teams can navigate a complex market landscape with ease and gain the context and clarity to separate signals from noise.
That’s why 90% of leading global investment banks leverage AlphaSense to surface the intelligence and insights teams trust to make their most important decisions.
From slide generation to valuation modeling, and funding screening to AI-led expert interviews, AlphaSense streamlines the everyday workflows that drive deal activity — all in one unified platform.
