Traditional Banks - Mexico

Mexico

In 2024, it is projected that the net interest income in the Traditional Banks market market in Mexico will reach US$38.56bn.
The market is predominantly dominated by Traditional Retail Banking, which is expected to reach a market volume of US$24.49bn in the same year.
Looking ahead, the net interest income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 6.00%, resulting in a market volume of US$51.60bn by 2029.
When compared globally, China is anticipated to generate the highest net interest income of US$3,869.0bn in 2024.
Traditional banks in Mexico are facing stiff competition from digital 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 Mexico is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Mexican customers are increasingly seeking personalized banking services that cater to their specific needs and preferences. They value convenience, digital banking options, and competitive interest rates. As a result, traditional banks in Mexico are adapting their offerings to provide more digital solutions, streamline processes, and enhance customer experience.

Trends in the market: One of the key trends in the Traditional Banks market in Mexico is the growing competition from digital banks and fintech companies. These new players are disrupting the market by offering innovative products and services that appeal to tech-savvy customers. Traditional banks are responding by investing in technology, partnerships with fintech firms, and digital transformation to stay competitive in the evolving landscape.

Local special circumstances: Mexico's banking sector is influenced by unique regulatory and economic factors that impact the operations of traditional banks. The regulatory environment plays a crucial role in shaping the market dynamics and driving compliance requirements for financial institutions. Additionally, economic conditions, such as interest rates, inflation, and GDP growth, influence consumer behavior and banking trends in Mexico.

Underlying macroeconomic factors: The development of the Traditional Banks market in Mexico is also influenced by broader macroeconomic factors, such as political stability, foreign investment, and trade agreements. These factors impact the overall business climate, consumer confidence, and investment opportunities in the country. As traditional banks navigate through these macroeconomic challenges, they are focusing on innovation, customer-centric strategies, and sustainable growth initiatives to stay resilient in the competitive 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.