Banking - North America

North America

In 2024, the projected Net Interest Income in the Banking market of North America is expected to reach a staggering amount of US$0.75tn.
It is worth noting that Traditional Banks are the dominant players in this market segment, with a projected market volume of US$0.47tn in the same year.
Looking ahead to 2029, the Net Interest Income is expected to exhibit a compound annual growth rate (CAGR 2024-2029) of 4.40%, resulting in a market volume of US$0.93tn by that year.
When compared globally, it is interesting to observe that the highest Net Interest Income is anticipated to be generated China, with a projected amount of US$4,332.0bn in 2024.
This clearly demonstrates the significant role that China plays in the global Banking market industry.
In the North American banking market, the United States continues to lead with its innovative digital banking solutions and extensive branch network.

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

Over the past few years, the Banking market in North America has been experiencing significant transformations and advancements.

Customer preferences: Customers in North America are increasingly leaning towards digital banking solutions due to their convenience and accessibility. With the rise of online and mobile banking, customers now prefer to conduct their banking activities remotely, leading to a decrease in physical branch visits. Additionally, customers are placing a high value on personalized services and seamless user experiences.

Trends in the market: In the United States, the Banking market is witnessing a trend towards consolidation, with larger banks acquiring smaller regional banks to expand their market presence and customer base. This trend is driven by the desire to achieve economies of scale and enhance competitiveness in the market. Moreover, there is a growing focus on sustainable and socially responsible banking practices, with banks incorporating environmental, social, and governance (ESG) criteria into their decision-making processes.

Local special circumstances: In Canada, the Banking market is characterized by the dominance of a few major banks known as the "Big Five. " These banks have a significant market share and influence over the industry, leading to limited competition. As a result, smaller banks and new entrants face challenges in gaining a foothold in the market. However, the Canadian government has been taking steps to promote competition and innovation in the banking sector to benefit consumers.

Underlying macroeconomic factors: The economic stability and regulatory environment in North America play a crucial role in shaping the Banking market. Low interest rates set by central banks have impacted the profitability of banks, pushing them to explore new revenue streams and cost-cutting measures. Additionally, the ongoing digital transformation and technological advancements are driving banks to invest in innovative solutions to meet the evolving needs of customers and stay competitive in the market.

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.