Traditional Banks - BRICS

BRICS

In 2024, the projected Net Interest Income in the Traditional Banks market market is estimated to reach US$4.46tn.
Traditional Retail Banking is expected to dominate this market segment in the BRICS country, with a projected market volume of US$2.76tn.
Looking ahead, the Net Interest Income is anticipated to experience an annual growth rate (CAGR 2024-2029) of 5.47%, resulting in a market volume of US$5.82tn by 2029.
In terms of global comparison, China is expected to generate the highest Net Interest Income with US$3,869.0bn in 2024.
Brazil's traditional banks are facing stiff competition from digital banks, forcing them to invest in technology and improve their customer experience.

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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Currency

Analyst Opinion

The Traditional Banks market in BRICS countries is experiencing dynamic shifts and developments driven by various factors.

Customer preferences: Customers in BRICS countries are increasingly seeking personalized banking services that cater to their individual needs and preferences. They value convenience, digital banking options, and a seamless banking experience. As a result, traditional banks are adapting their services to offer online and mobile banking solutions, as well as innovative products to attract and retain customers.

Trends in the market: In Brazil, traditional banks are focusing on expanding their digital presence to reach a larger customer base in both urban and rural areas. The market is witnessing a rise in digital banking adoption, with customers embracing online and mobile banking services for their convenience and accessibility. In Russia, traditional banks are investing in technology to enhance their cybersecurity measures and protect customer data. With the increasing prevalence of cyber threats, banks are prioritizing the security of online transactions and customer information to build trust and confidence among their clientele. In India, traditional banks are leveraging data analytics and artificial intelligence to offer personalized banking solutions and improve customer engagement. By analyzing customer behavior and preferences, banks are able to tailor their services and products to meet the evolving needs of the market. In China, traditional banks are exploring partnerships with fintech companies to enhance their digital capabilities and reach a tech-savvy customer base. Collaborations with technology firms allow banks to offer innovative financial services and stay competitive in the rapidly evolving market landscape.

Local special circumstances: In South Africa, traditional banks are facing increasing competition from digital banks and fintech startups that are disrupting the market with innovative solutions. To stay relevant, traditional banks are focusing on enhancing their digital offerings and customer service to retain their market share and attract new customers.

Underlying macroeconomic factors: The economic growth and stability in BRICS countries play a significant role in shaping the traditional banks market. As the middle class expands and disposable incomes rise, there is a growing demand for banking services and financial products. Additionally, government policies and regulations impact the banking sector, influencing market trends and developments in the long run.

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.