Traditional Banks - Nordics

Nordics

In 2024, the Net Interest Income in the Traditional Banks market market of the Nordics is projected to reach US$67.24bn.
Traditional Commercial Banking dominates this market segment with a projected market volume of US$42.59bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 3.57%, resulting in a market volume of US$80.13bn by 2029.
In terms of global comparison, China is anticipated to generate the highest Net Interest Income of US$3,869.0bn in 2024.
In the Nordics, traditional banks are facing increasing competition from digital disruptors, forcing them to innovate and enhance their digital offerings.

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

Customer preferences: Customers in the Nordics are increasingly leaning towards digital banking services, seeking convenience and efficiency in their financial transactions. The demand for seamless online and mobile banking experiences has been driving traditional banks in the region to invest in digital transformation initiatives to meet these evolving preferences.

Trends in the market: One notable trend in the Traditional Banks market in Nordics is the rise of sustainable and socially responsible banking practices. Customers are showing a growing interest in banks that prioritize environmental and social considerations in their operations and investment decisions. Traditional banks in the region are adapting to this trend by incorporating sustainability principles into their business strategies.

Local special circumstances: The Nordics region is known for its high level of digital adoption and tech-savvy population. This unique local circumstance has significantly influenced the development of the Traditional Banks market, with banks in the Nordics leading the way in digital innovation and fintech collaboration. The competitive landscape in the region is shaped by a strong focus on technological advancements and customer-centric solutions.

Underlying macroeconomic factors: The stable economic environment in the Nordics has provided traditional banks with a solid foundation for growth and expansion. Favorable macroeconomic conditions, including low unemployment rates and strong GDP growth, have contributed to a positive outlook for the banking sector in the region. Additionally, regulatory stability and transparency in the financial industry have fostered trust and confidence among customers, further supporting the development of the Traditional Banks market in Nordics.

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.