Traditional Banks - ASEAN

ASEAN

In 2024, the projected Net Interest Income in the Traditional Banks market market in ASEAN is estimated to reach US$133.10bn.
Among the market segments, Traditional Retail Banking is expected to dominate with a projected market volume of US$76.51bn in 2024.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate (CAGR 2024-2029) of 2.96%, leading to a market volume of US$154.00bn by 2029.
In a global context, it is worth noting that the highest Net Interest Income is projected to be generated China, amounting to US$3,869.0bn in 2024.
In the ASEAN region, traditional banks in Singapore are embracing digitalization to enhance customer experience and compete with fintech startups.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks 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. 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.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, 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 and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Market

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Currency

Analyst Opinion

The Traditional Banks market in ASEAN is experiencing significant growth and development driven by various factors.

Customer preferences: Customers in ASEAN countries tend to have a strong preference for traditional banking services due to a combination of factors. Many customers in the region value the trust and reliability associated with traditional banks, especially in comparison to newer financial technology (fintech) companies. Additionally, traditional banks often offer a wide range of services and products that cater to the diverse needs of customers in ASEAN countries.

Trends in the market: In Indonesia, one of the key trends in the Traditional Banks market is the increasing focus on digital transformation. Traditional banks in Indonesia are investing heavily in digital channels and technologies to enhance customer experience and reach a larger customer base. This trend is driven by the growing adoption of digital banking services among Indonesian consumers.

Local special circumstances: In Malaysia, the Traditional Banks market is influenced by the presence of Islamic banks that operate based on Sharia principles. These Islamic banks offer unique financial products and services that cater to the specific needs of Muslim customers in Malaysia. The coexistence of conventional and Islamic banks in the Malaysian market creates a diverse banking landscape that appeals to a wide range of customers.

Underlying macroeconomic factors: The growth of the Traditional Banks market in ASEAN is also supported by favorable macroeconomic conditions in the region. ASEAN countries have been experiencing steady economic growth, which has led to an increase in disposable income and overall financial stability among consumers. As a result, more individuals and businesses are turning to traditional banks for their banking and financial needs, driving the growth of 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.