Traditional Banks - Georgia

Georgia

In 2024, the projected Net Interest Income in Georgia's Traditional Banks market market is set to reach US$0.87bn.
Traditional Retail Banking dominates this market segment, with a projected market volume of US$0.46bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate of -6.25% (CAGR 2024-2029), resulting in a market volume of US$0.63bn by 2029.
It is worth noting that in a global comparison, China is anticipated to generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Traditional banks in Georgia are facing increased competition from online banking platforms, leading to a shift in customer preferences.

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 Georgia is experiencing a notable shift in customer preferences, market trends, and local special circumstances.

Customer preferences: Customers in Georgia are increasingly seeking out traditional banks for their financial needs due to a growing preference for personalized service and face-to-face interactions. This trend is driven by a cultural emphasis on trust and relationship-building in financial matters, leading individuals to opt for the familiarity and security offered by traditional banking institutions.

Trends in the market: One prominent trend in the Traditional Banks market in Georgia is the expansion of digital banking services to meet the evolving needs of customers. While traditional banks continue to prioritize in-person interactions, they are also investing in online and mobile banking platforms to enhance convenience and accessibility for tech-savvy consumers. This hybrid approach allows traditional banks to cater to a wider range of preferences and demographics within the market.

Local special circumstances: Georgia's unique geographical position as a gateway between Europe and Asia has influenced the Traditional Banks market in the country. The presence of international businesses and expatriates has created a demand for specialized banking services, such as multi-currency accounts and cross-border transactions. Traditional banks in Georgia have capitalized on this opportunity by offering tailored solutions to meet the needs of a diverse customer base.

Underlying macroeconomic factors: The stability of Georgia's economy and regulatory environment plays a crucial role in shaping the Traditional Banks market. Favorable government policies, low inflation rates, and steady economic growth have contributed to a positive business climate for traditional banks to operate and expand their services. Additionally, strategic partnerships with foreign financial institutions have facilitated knowledge transfer and technology adoption, further fueling the development of 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.