Traditional Banks - North America

North America

In 2024, the projected Net Interest Income in the Traditional Banks market market in North America is expected to reach a staggering US$471.10bn.
It is worth noting that Traditional Commercial Banking holds the dominant position in this market segment, with a projected market volume of US$400.30bn in 2024.
Looking ahead, the Net Interest Income is anticipated to exhibit a steady annual growth rate (CAGR 2024-2029) of 4.12%, resulting in a market volume of US$576.40bn by 2029.
When compared globally, it is interesting to observe that China is expected to generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Traditional banks in North America are facing increasing competition from digital banking platforms and fintech companies, forcing them to innovate and adapt to changing 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

Over the past few years, the Traditional Banks market in North America has witnessed significant changes and developments.

Customer preferences: Customers in North America are increasingly seeking personalized and convenient banking services. They value seamless digital banking experiences, such as online account management, mobile banking apps, and quick customer support. Additionally, there is a growing demand for sustainable and socially responsible banking practices among customers in the region.

Trends in the market: In the United States, traditional banks are facing tough competition from digital banks and fintech companies. As a result, many traditional banks are investing heavily in technology to enhance their digital offerings and stay relevant in the market. Moreover, there is a trend towards consolidation in the Canadian banking sector, with larger banks acquiring smaller regional players to expand their market share and customer base.

Local special circumstances: In Mexico, traditional banks are focusing on financial inclusion initiatives to reach the unbanked population in rural areas. These efforts include setting up mobile banking units and partnering with local communities to provide basic banking services. In Canada, traditional banks are adapting to the changing demographic landscape by offering specialized services for the growing immigrant population, such as multilingual customer support and tailored financial products.

Underlying macroeconomic factors: The low interest rate environment in North America is putting pressure on traditional banks' profit margins, leading them to explore alternative revenue streams such as wealth management and investment banking. Additionally, the regulatory landscape in the region is evolving, with stricter compliance requirements and data privacy regulations impacting how traditional banks operate and interact with customers.

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.