Traditional Banks - G7

In 2024, the projected Net Interest Income in the Traditional Banks market market of the G7 countries is estimated to reach US$0.92tn.
Traditional Commercial Banking is expected to dominate this market segment with a projected market volume of US$0.73tn in 2024.
Looking ahead, the Net Interest Income is anticipated to demonstrate an annual growth rate (CAGR 2024-2029) of 2.68%, resulting in a market volume of US$1.05tn by 2029.
It is worth noting that in global comparison, China is projected to generate the highest Net Interest Income, estimated at US$3,869.0bn in 2024.
In the traditional banking market, Canadian banks are known for their strong focus on stability and conservative lending practices.

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

Amidst changing consumer behaviors and technological advancements, the Traditional Banks market in G7 countries is experiencing notable shifts in customer preferences and market trends.

Customer preferences: Customers in G7 countries are increasingly seeking personalized and convenient banking services. They value seamless digital experiences, such as online and mobile banking, as well as quick and efficient customer support. Moreover, there is a growing demand for sustainable and socially responsible banking practices among customers in these developed economies.

Trends in the market: In the United States, traditional banks are focusing on enhancing their digital capabilities to compete with fintech companies. This includes investing in AI and machine learning technologies to improve customer service and offer personalized financial solutions. In the United Kingdom, traditional banks are expanding their product offerings to include services such as wealth management and insurance to cater to diverse customer needs.

Local special circumstances: In Japan, the Traditional Banks market is characterized by a strong preference for in-person banking services, despite the increasing popularity of digital banking globally. This unique consumer behavior has led traditional banks in Japan to maintain a significant physical presence while also investing in digital channels to meet evolving customer expectations.

Underlying macroeconomic factors: The economic landscape in G7 countries, marked by low interest rates and regulatory changes, is influencing the Traditional Banks market. Banks are facing pressure to improve operational efficiency and reduce costs to maintain profitability in a low-interest-rate environment. Additionally, regulatory reforms aimed at promoting competition and innovation are driving traditional banks to adapt their business models to remain competitive in 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.