Traditional Banks - Kazakhstan

Kazakhstan

The Traditional Banks market market in Kazakhstan is expected to witness a significant increase in Net Interest Income, projected to reach US$4.85bn by the year 2024.
Among the various segments, Traditional Retail Banking dominates the market, with a projected market volume of US$3.32bn in 2024.
Looking ahead, the Net Interest Income is anticipated to grow at an annual growth rate of 1.64% (CAGR 2024-2029), resulting in a market volume of US$5.26bn by the year 2029.
In a global comparison, it is worth noting that China is expected to generate the highest Net Interest Income, with a projected amount of US$3,869.0bn in 2024.
The traditional banking sector in Kazakhstan has seen a rise in digital transformation efforts to cater to the evolving needs of tech-savvy customers.

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 Kazakhstan is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Customers in Kazakhstan are increasingly seeking personalized banking services that cater to their individual needs and preferences. This shift towards personalized services is being driven by a growing demand for convenience, efficiency, and digital banking solutions. As customers become more tech-savvy, traditional banks are adapting their offerings to include online and mobile banking options to meet the evolving needs of their customer base.

Trends in the market: One of the notable trends in the Traditional Banks market in Kazakhstan is the growing adoption of fintech solutions and digital banking services. Traditional banks are facing increasing competition from fintech companies that offer innovative and convenient financial services. To stay competitive, traditional banks in Kazakhstan are investing in digital transformation initiatives to enhance their customer experience and streamline their operations. This trend is expected to continue shaping the market landscape in the coming years.

Local special circumstances: Kazakhstan's banking sector is influenced by various local factors, including regulatory changes, economic conditions, and geopolitical developments. The government plays a significant role in shaping the banking industry through regulations and policies that impact the operations of traditional banks. Additionally, the country's economic stability and growth prospects also influence the performance of the Traditional Banks market in Kazakhstan. Understanding and navigating these local special circumstances is essential for traditional banks to thrive in the market.

Underlying macroeconomic factors: The development of the Traditional Banks market in Kazakhstan is also influenced by underlying macroeconomic factors such as GDP growth, inflation rates, and interest rates. Economic stability and growth are essential for the banking sector to flourish, as they impact consumer confidence, borrowing behavior, and investment decisions. Traditional banks must closely monitor and adapt to these macroeconomic factors to ensure their long-term sustainability and success 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.