Traditional Banks - Asia

Asia

In 2024, the projected Net Interest Income in the Traditional Banks market market in Asia is estimated to reach US$5.15tn.
Traditional Retail Banking is set to dominate this market segment with a projected market volume of US$3.12tn in 2024.
Looking ahead, the Net Interest Income is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 5.25%, leading to a market volume of US$6.65tn by 2029.
When comparing globally, it is worth noting that China will generate the highest Net Interest Income, with an estimated value of US$3,869.0bn in 2024.
In Japan, traditional banks are facing stiff competition from the rise of digital banking services.

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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Analyst Opinion

The Traditional Banks market in Asia has been experiencing significant developments and trends in recent years.

Customer preferences: Customers in Asia are increasingly seeking personalized banking services that cater to their specific needs and preferences. They are looking for seamless digital banking solutions that offer convenience and efficiency in managing their finances. Additionally, there is a growing demand for sustainable banking practices and socially responsible investments among customers in the region.

Trends in the market: In China, the Traditional Banks market is witnessing a shift towards digital transformation and innovation. With the rise of fintech companies and digital payment platforms, traditional banks are adapting by incorporating advanced technologies such as artificial intelligence and blockchain to enhance their services and improve customer experience. Moreover, there is a growing trend of partnerships between traditional banks and fintech firms to offer a wider range of financial products and services to customers.

Local special circumstances: In Japan, the Traditional Banks market is characterized by a strong emphasis on trust and long-term relationships with customers. Traditional banks in Japan focus on providing personalized services and building trust with customers through face-to-face interactions. Despite the increasing popularity of digital banking, many customers in Japan still prefer the traditional banking model due to the high level of trust and reliability associated with it.

Underlying macroeconomic factors: The economic growth and increasing disposable income in countries like India and Indonesia are driving the growth of the Traditional Banks market in Asia. As more people enter the middle class and seek banking services, traditional banks are expanding their presence in these markets to tap into the growing customer base. Additionally, regulatory reforms and government initiatives to promote financial inclusion are creating opportunities for traditional banks to reach underserved populations and expand their market share.

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.