Traditional Banks - Canada

Canada

In 2024, it is projected that the net interest income in the Traditional Banks market market of Canada will reach US$53.09bn.
Traditional Commercial Banking dominates this market segment in Canada, with a projected market volume of US$38.58bn in 2024.
Looking ahead, the net interest income is expected to show an annual growth rate (CAGR 2024-2029) of -0.19%, resulting in a market volume of US$52.58bn by 2029.
When comparing globally, it is noteworthy that China will generate the highest net interest income, reaching US$3,869.0bn in 2024.
Traditional banks in Canada are facing increased competition from fintech startups, leading to a shift towards 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 Canada is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Customers in Canada are increasingly seeking personalized banking services that cater to their specific needs and preferences. This has led traditional banks to invest in digital technologies to enhance customer experience and provide convenient banking solutions. Moreover, customers are placing a higher emphasis on sustainability and ethical banking practices, influencing traditional banks to adopt more environmentally friendly policies.

Trends in the market: One prominent trend in the Canadian Traditional Banks market is the growing competition from digital banks and fintech companies. These new players are challenging traditional banks by offering innovative products, lower fees, and seamless digital experiences. To stay competitive, traditional banks in Canada are focusing on digital transformation, introducing online banking services, mobile apps, and digital payment solutions to meet the evolving needs of customers.

Local special circumstances: In Canada, the banking sector is highly regulated, which creates a stable and secure environment for traditional banks to operate. The country's strong economy and low unemployment rate also contribute to the growth of the Traditional Banks market. Additionally, Canada's diverse population and varying demographic trends influence the demand for different banking products and services across regions.

Underlying macroeconomic factors: The stability of the Canadian economy, low inflation rates, and government policies play a significant role in shaping the Traditional Banks market. As the economy continues to grow, traditional banks are presented with opportunities to expand their customer base and introduce new financial products. Moreover, fluctuations in interest rates and changes in consumer spending patterns impact the profitability and growth potential of traditional banks in Canada.

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.