News
“Need for AI to drive M&A,” reveals new Mayer Brown study | News
New research from international law firm Mayer Brown has revealed that business leaders are increasingly wary of their organisations’ ability to keep up with developments in AI and technology. Of those surveyed, more than seven in 10 are concerned that they are being overtaken by developments in AI.
The survey, which includes insights from 197 business leaders, found that 72% of financial institution leaders and 83% of investment firm leaders believe the need to enhance their existing AI capabilities will be the main driver of M&A activity in the coming years.
Lauren PryorPartner and Co-Leader of the Financial Services Product Team and Financial Services M&A Group at Mayer Brown commented: “AI is rapidly reshaping the business landscape and there is a clear recognition among financial services leaders of the critical role technology plays in their transformation efforts – many are re-examining their business strategies and asking, ‘How could AI transform my business?’ This, in turn, is impacting their M&A decisions. Additionally, companies are expressing a desire for more support. Acquisition growth can quickly fill the knowledge gap and help our clients stay ahead of the curve.”
Yet despite the recognition of the importance of technology, less than a third of financial services firms have a clear AI strategy. Of those that do, only 34% have a strategy that looks beyond the next twelve months. Increasingly, business leaders are looking beyond organic growth to AI expertise or infrastructure.
The research also identified seven key dimensions of a future-ready business: Creative Capital, Geopolitical Agility, New Risk Mindset, Regulatory Anticipation, Sustainability Focus, Technological Resilience, and Visionary Growth and Leadership. Among the most significant insights, the research found:
- Nearly two-thirds (64%) of business leaders recognize the need for a complete organizational transformation and 68% believe that the current market environment creates challenges to achieving business transformation.
- More than two-thirds (68%) of financial institution leaders say their organizations are not transforming quickly enough (compared to 62% of investment firms)
- While 86% of financial services companies have an overall business transformation strategy in place, most do not look beyond 12 months
- More than two-thirds (64% of financial institutions and 69% of investment firms) believe their organizations need a complete transformation to thrive and create value.