Banking - New Zealand

New Zealand

In 2024, it is projected that the Net Interest Income in the Banking market of New Zealand will reach US$17.66bn.
Traditional Banks are expected to dominate the market with a projected market volume of US$11.92bn in the same year.
Looking ahead, the Net Interest Income is anticipated to show an annual growth rate (CAGR 2024-2029) of -0.97%, resulting in a market volume of US$16.82bn by 2029.
When compared globally, the country generating the highest Net Interest Income will be China, with an estimated amount of US$4,332.0bn in 2024.
New Zealand's banking market is experiencing a surge in digital banking services, with a growing number of customers opting for online and mobile banking options.

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 New Zealand is witnessing a shift in customer preferences towards digital banking solutions and personalized services.

Customer preferences: Customers in New Zealand are increasingly gravitating towards digital banking services due to their convenience and accessibility. With the rise of smartphone usage and internet penetration in the country, customers are opting for online and mobile banking options to conduct their financial transactions. Additionally, there is a growing demand for personalized services that cater to individual needs and preferences, driving banks to innovate and tailor their offerings accordingly.

Trends in the market: One prominent trend in the New Zealand banking market is the emergence of fintech companies offering alternative financial solutions. These fintech firms are challenging traditional banks by providing innovative services such as peer-to-peer lending, digital wallets, and robo-advisors. As a result, traditional banks are under pressure to enhance their digital capabilities and collaborate with fintech players to stay competitive in the evolving market landscape. Moreover, sustainable banking practices are gaining traction in New Zealand, with customers showing a preference for banks that prioritize environmental and social responsibility in their operations.

Local special circumstances: New Zealand's unique geographical location and relatively small population size compared to other countries play a role in shaping the banking market. The country's distance from major global financial hubs can present challenges in terms of accessing international banking services and expertise. As a result, local banks in New Zealand must focus on building strong domestic operations while also leveraging technology to connect with global markets. Additionally, the country's strong regulatory environment ensures stability and security in the banking sector, instilling trust among customers and investors.

Underlying macroeconomic factors: The stable economic growth and low unemployment rate in New Zealand are supporting the development of the banking market. As the economy continues to expand, there is an increased demand for financial products and services, driving banks to innovate and expand their offerings. Furthermore, the government's initiatives to promote financial inclusion and literacy are creating opportunities for banks to reach underserved populations and expand their customer base. Overall, the combination of favorable macroeconomic conditions and evolving customer preferences is shaping the future of the banking market in New Zealand.

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.