Banking - Mongolia

Mongolia

In Mongolia, the Net Interest Income in the Banking market is expected to reach US$4.87bn by 2024.
Traditional Banks dominate the market with a projected market volume of US$4.73bn in the same year.
Looking ahead, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2029) of 4.68%, resulting in a market volume of US$6.12bn by 2029.
When compared globally, China is projected to generate the highest Net Interest Income of US$4,332.0bn in 2024.
Mongolia's banking sector is experiencing a surge in digital banking services, driven by increasing internet penetration and mobile phone usage.

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 Mongolia, the Banking market is witnessing significant growth and development driven by various factors.

Customer preferences: Customers in Mongolia are increasingly leaning towards digital banking solutions due to the convenience and accessibility they offer. The younger population, in particular, is more inclined towards online and mobile banking services, leading to a shift in traditional banking practices.

Trends in the market: One notable trend in the Mongolian Banking market is the increasing focus on financial inclusion. Banks are expanding their reach to rural and remote areas, providing banking services to previously underserved populations. This trend is not only driven by regulatory requirements but also by the potential for growth in untapped markets.

Local special circumstances: Mongolia's unique geographical landscape, with vast rural areas and nomadic populations, presents challenges for traditional brick-and-mortar banks. As a result, there is a growing emphasis on innovative banking solutions such as agent banking and mobile money to reach customers in remote locations. Additionally, the country's mining industry plays a significant role in shaping the banking sector, with banks offering specialized services to cater to the needs of this sector.

Underlying macroeconomic factors: The economic stability and growth in Mongolia are contributing to the expansion of the Banking market. As the economy diversifies beyond mining, there is an increased demand for banking services to support various industries. Additionally, favorable government policies and regulatory reforms are creating a conducive environment for banking sector development.

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.