Banking - Northern Europe

Northern Europe

In 2024, the projected Net Interest Income in the Banking market in Northern Europe is expected to reach US$103.90bn.
Traditional Banks dominate this market segment, with a projected market volume of US$68.24bn in the same year.
Looking ahead, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2029) of 4.26%, resulting in a market volume of US$128.00bn by 2029.
When compared globally, it is noteworthy that China is expected to generate the highest Net Interest Income, reaching US$4,332.0bn in 2024.
In Northern Europe's banking market, Sweden is leading the way in digital innovation with its cashless society and mobile banking services.

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 recent years, the Banking market in Northern Europe has been experiencing notable developments and trends that are shaping the industry landscape.

Customer preferences: Customers in Northern Europe are increasingly leaning towards digital banking solutions, opting for convenience and efficiency in their financial transactions. The demand for online banking services and mobile banking apps has been on the rise, driving traditional banks to invest more in their digital infrastructure to meet customer expectations.

Trends in the market: In countries like Sweden and Denmark, there is a growing trend towards cashless societies, with a significant decrease in the use of physical cash for everyday transactions. This shift is pushing banks to focus more on digital payment solutions and innovative technologies such as contactless payments and mobile wallets to cater to the changing needs of their customers.

Local special circumstances: One unique aspect of the Banking market in Northern Europe is the presence of strong regulatory frameworks that prioritize consumer protection and data privacy. Countries in this region have stringent regulations in place to ensure the security of customer data and prevent financial fraud, which has influenced the way banks operate and offer their services to the public.

Underlying macroeconomic factors: The stable economic conditions in Northern Europe have played a crucial role in the development of the Banking market. With low unemployment rates and steady GDP growth, consumers in this region have shown confidence in the banking sector, leading to increased investments in financial products and services. Additionally, the region's focus on sustainability and green initiatives has prompted banks to incorporate environmental considerations into their business practices, aligning with the values of their eco-conscious customer base.

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.