Traditional Banks - Australia & Oceania

Australia & Oceania

In Australia & Oceania, the Net Interest Income in the Traditional Banks market market is forecasted to reach US$88.79bn in 2024.
Traditional Commercial Banking dominates this market segment with a projected market volume of US$76.25bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate (CAGR 2024-2029) of -1.63%, resulting in a market volume of US$81.79bn by 2029.
In terms of global comparison, China is anticipated to generate the highest Net Interest Income, amounting to US$3,869.0bn in 2024.
The traditional banking sector in Australia is experiencing a decline in customer loyalty due to the rise of digital banking alternatives.

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 Australia & Oceania is experiencing significant developments.

Customer preferences: Customers in Australia and Oceania are increasingly seeking personalized banking services that cater to their individual needs and preferences. They value convenience, digital banking options, and seamless customer experiences. As a result, traditional banks in the region are focusing on enhancing their digital capabilities and offering innovative solutions to meet the evolving demands of their customers.

Trends in the market: In Australia, traditional banks are facing competition from digital banks and fintech companies that are disrupting the market with innovative products and services. To stay competitive, traditional banks are investing in technology and digital transformation initiatives to improve operational efficiency and customer engagement. Additionally, there is a growing trend towards sustainable banking practices, with customers showing a preference for banks that prioritize environmental and social responsibility.

Local special circumstances: One of the unique characteristics of the Australian banking market is the dominance of a few major banks, which have historically held a significant market share. However, with the rise of digital banking and changing customer preferences, smaller banks and new entrants are gaining traction by offering niche services and personalized experiences. This has led to increased competition in the market and is driving traditional banks to innovate and differentiate themselves to retain customers.

Underlying macroeconomic factors: The macroeconomic environment in Australia and Oceania plays a crucial role in shaping the Traditional Banks market. Factors such as economic growth, interest rates, regulatory changes, and geopolitical developments impact the profitability and stability of banks in the region. As traditional banks navigate through these macroeconomic factors, they are also adapting to changing consumer behaviors and technological advancements to stay relevant in a competitive market landscape.

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.