Banking - Central & Western Europe

Central & Western Europe

In Central & Western Europe, the projected Net Interest Income in the Banking market for 2024 is expected to reach US$0.83tn.
Traditional Banks are set to dominate this market segment, with a projected market volume of US$0.56tn in the same year.
Looking ahead, the Net Interest Income is expected to exhibit a compound annual growth rate (CAGR 2024-2029) of 3.38%, resulting in a market volume of US$0.98tn by 2029.
When compared globally, it is worth noting that China is anticipated to generate the highest Net Interest Income, with a projected value of US$4,332.0bn in 2024.
In Central & Western Europe, Switzerland remains a global banking powerhouse, known for its robust financial services sector and strict regulations.

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

In Central & Western Europe, the Banking market is experiencing significant growth and development driven by various factors.

Customer preferences: Customers in Central & Western Europe are increasingly demanding more personalized and convenient banking services. This has led to a rise in digital banking solutions, such as mobile banking apps and online account management. Customers are also showing a preference for sustainable and socially responsible banking practices, influencing the development of green banking initiatives in the region.

Trends in the market: In Germany, traditional banks are facing stiff competition from digital-only banks, leading to a rise in partnerships and collaborations between the two. This trend is driven by the increasing popularity of online banking among tech-savvy German consumers. In France, the Banking market is seeing a shift towards open banking, with new regulations promoting competition and innovation in the sector. This has resulted in the emergence of fintech startups offering specialized banking services.

Local special circumstances: Switzerland, known for its strong banking sector, is facing challenges due to increased regulatory scrutiny and international pressure to improve transparency. Swiss banks are adapting by focusing on wealth management services and expanding their global presence. In Spain, the Banking market is recovering from the effects of the financial crisis, with banks restructuring their operations and enhancing digital capabilities to remain competitive in the market.

Underlying macroeconomic factors: The economic stability and growth in Central & Western Europe are driving investments in the Banking sector. Low interest rates set by the European Central Bank have encouraged borrowing and lending activities, boosting the overall performance of banks in the region. Additionally, the increasing integration of European financial markets is creating opportunities for cross-border banking services and collaborations, further fueling the growth of the Banking market in Central & Western Europe.

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.