Traditional Banks - Mongolia

Mongolia

In 2024, the projected Net Interest Income in the Traditional Banks market market of Mongolia is expected to reach US$4.73bn.
Traditional Commercial Banking dominates the market with a projected market volume of US$2.58bn in 2024.
The Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 4.41%, resulting in a market volume of US$5.87bn by 2029.
In global comparison, China is expected to generate the highest Net Interest Income with US$3,869.0bn in 2024.
Traditional Banks in Mongolia are facing increasing competition from digital banking platforms, leading to a shift in consumer 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

Traditional Banks in Mongolia are experiencing a significant shift in customer preferences, market trends, and local special circumstances.

Customer preferences: Customers in Mongolia are increasingly seeking out traditional banks for their financial needs due to the stability and reliability they offer. With a strong emphasis on security and trust, traditional banks are favored by customers who value a long-standing reputation and a physical presence in the market. Additionally, the personalized services and face-to-face interactions provided by traditional banks cater to the preferences of many Mongolian customers who prioritize a human touch in their banking experience.

Trends in the market: One notable trend in the Traditional Banks market in Mongolia is the adoption of digital banking services to complement their brick-and-mortar operations. Traditional banks are investing in online and mobile banking platforms to enhance customer convenience and reach a wider audience. This trend aligns with global developments in the banking sector, where digital transformation is becoming increasingly crucial for staying competitive and meeting evolving customer expectations. Moreover, traditional banks in Mongolia are also focusing on expanding their product offerings to include a diverse range of financial services, catering to the growing needs of customers in a rapidly developing economy.

Local special circumstances: Mongolia's unique geographical landscape and dispersed population present challenges and opportunities for traditional banks in the market. The country's vast rural areas and nomadic population require traditional banks to establish a widespread network of branches to ensure financial inclusion and accessibility for all customers. This localized approach sets traditional banks apart from digital-only competitors and reinforces their position as trusted financial institutions deeply rooted in the local community.

Underlying macroeconomic factors: The macroeconomic environment in Mongolia, characterized by steady economic growth and increasing disposable income, is driving the development of the Traditional Banks market. As the economy expands, the demand for banking services, such as loans, savings accounts, and investment products, is on the rise. Traditional banks play a vital role in supporting this economic growth by providing the necessary financial infrastructure and expertise to facilitate business activities and personal wealth management. Overall, the favorable macroeconomic conditions in Mongolia are propelling the growth and evolution of the Traditional Banks market in the country.

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.