Banking - BRICS

BRICS

In 2024, the projected Net Interest Income in the Banking market for BRICS countries is expected to reach a staggering amount of US$5.03tn.
Among these countries, Traditional Banks are set to dominate the market, with a projected market volume of US$4.46tn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit a Compound Annual Growth Rate (CAGR 2024-2029) of 6.15%, resulting in a market volume of US$6.78tn by 2029.
When considering the global landscape, it is worth noting that China is expected to generate the highest Net Interest Income, with a projected amount of US$4,332.0bn in 2024.
This reinforces China's position as a key player in the Banking market sector within the BRICS countries.
In India, the banking market is experiencing a rapid rise in digital banking services, as more customers are embracing mobile and internet banking platforms.

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 BRICS countries is experiencing dynamic growth and evolving trends.

Customer preferences: Customers in Brazil are increasingly turning to digital banking solutions for convenience and accessibility. In Russia, there is a growing demand for personalized banking services tailored to individual needs. Indian consumers prioritize mobile banking and online transactions for their speed and efficiency. Chinese customers show a preference for innovative fintech solutions and seamless integration with e-commerce platforms. South African clients seek banking options that promote financial inclusion and cater to a diverse population.

Trends in the market: In Brazil, the banking sector is witnessing a rise in digital banks and fintech startups challenging traditional institutions. Russia is seeing a trend towards consolidation among banks to improve efficiency and competitiveness. India is experiencing a surge in mobile wallet usage and digital payment platforms. China's banking market is embracing blockchain technology and artificial intelligence for enhanced security and customer service. South Africa is focusing on sustainable banking practices and green financial products to meet the evolving needs of environmentally conscious consumers.

Local special circumstances: Brazil's banking market is influenced by regulatory changes aimed at promoting competition and innovation. Russia's banking sector is adapting to geopolitical factors and economic sanctions, impacting foreign investment and capital flows. India's market is characterized by a large unbanked population, driving efforts towards financial inclusion through initiatives like Jan Dhan Yojana. China's banking industry operates within a controlled regulatory environment that shapes market dynamics and technological advancements. South Africa's sector is shaped by a history of inequality, leading to a focus on financial education and empowerment in underserved communities.

Underlying macroeconomic factors: Brazil's banking market growth is supported by a recovering economy and increasing digital penetration among the population. Russia's sector is influenced by fluctuations in oil prices and international sanctions, impacting investment decisions and market stability. India's market benefits from a young demographic and government initiatives to promote a cashless economy. China's banking industry is driven by rapid urbanization, technological innovation, and government support for digital transformation. South Africa's sector faces challenges from economic inequality, unemployment, and regulatory changes impacting market competition and consumer trust.

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.