Banking - ASEAN

ASEAN

In 2024, it is projected that the Net Interest Income in the Banking market in ASEAN will reach a staggering US$148.30bn.
The market is currently dominated by Traditional Banks, with a projected market volume of US$133.10bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 3.24%, resulting in a market volume of US$173.90bn by 2029.
In terms of global comparison, it is noteworthy that China is expected to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
In Thailand, digital banking services are rapidly gaining popularity among consumers, with a growing number of people opting for mobile banking apps for their financial needs.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in ASEAN has been experiencing significant growth and development in recent years.

Customer preferences: Customers in ASEAN countries are increasingly shifting towards digital banking solutions, driven by the convenience and accessibility offered by online and mobile banking platforms. The younger population, in particular, is more inclined to use digital channels for their banking needs, prompting traditional banks to invest in digital transformation to cater to evolving customer preferences.

Trends in the market: In Indonesia, the largest economy in ASEAN, the banking sector is witnessing a trend towards greater financial inclusion, with banks expanding their reach to unbanked populations through innovative digital solutions and partnerships with fintech companies. In Malaysia, Islamic banking is gaining prominence, reflecting the country's large Muslim population and their preference for Sharia-compliant financial products. Meanwhile, in Singapore, a key financial hub in the region, banks are focusing on wealth management services to cater to the growing number of high-net-worth individuals in the country.

Local special circumstances: In the Philippines, the banking market is characterized by a high level of competition among both domestic and international players, leading to a wide range of banking products and services available to customers. This competitive landscape is driving banks to differentiate themselves through personalized customer experiences and innovative offerings. Additionally, the country's archipelagic geography presents challenges for traditional brick-and-mortar banks, spurring the adoption of digital banking channels to reach customers in remote areas.

Underlying macroeconomic factors: The economic growth and rising middle-class population in ASEAN countries are contributing to the expansion of the banking market, with increasing demand for loans, mortgages, and investment products. Moreover, government initiatives to promote financial literacy and inclusion are driving more people to access formal banking services, further fueling the growth of the sector. The low-interest-rate environment in the region is also encouraging borrowing and investment activities, supporting the overall development of the banking market in ASEAN.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.