Traditional Banks - Northern Europe

Northern Europe

In 2024, the projected Net Interest Income in the Traditional Banks market market in Northern Europe is estimated to reach US$68.24bn.
Among the market segments, Traditional Commercial Banking is expected to dominate with a projected market volume of US$43.25bn in 2024.
Over the period from 2024 to 2029, the Net Interest Income is anticipated to demonstrate an annual growth rate (CAGR 2024-2029) of 3.51%, leading to a market volume of US$81.08bn by 2029.
It is worth noting that in the global context, China is set to generate the highest Net Interest Income, projected to be US$3,869.0bn in 2024.
Traditional banks in Northern Europe are diversifying their services and investing heavily in digital transformation to stay competitive in the rapidly evolving banking industry.

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 Northern Europe is experiencing a shift in customer preferences, trends, and local special circumstances, driven by underlying macroeconomic factors.

Customer preferences: Customers in Northern Europe are increasingly seeking personalized and convenient banking services. They value digital banking solutions that offer ease of access, efficiency, and security. As a result, traditional banks in the region are focusing on enhancing their online and mobile banking platforms to meet the evolving needs of tech-savvy customers.

Trends in the market: In countries like Sweden and Denmark, there is a growing trend towards sustainable banking practices. Customers are showing a preference for banks that prioritize environmental and social responsibility in their operations. Traditional banks in these countries are responding by incorporating ESG (Environmental, Social, and Governance) criteria into their decision-making processes and offering green financial products.

Local special circumstances: Norway, known for its high adoption of digital technologies, has seen a rise in demand for innovative banking solutions such as biometric authentication and AI-powered chatbots. Traditional banks in Norway are investing in cutting-edge technologies to provide seamless and secure banking experiences to their customers. Additionally, the competitive landscape in Finland is driving traditional banks to differentiate themselves through unique value propositions, such as personalized financial advice and tailored product offerings.

Underlying macroeconomic factors: The low-interest-rate environment in Northern Europe is influencing the Traditional Banks market dynamics. Banks are facing pressure on their net interest margins, prompting them to explore alternative revenue streams and cost-cutting measures. Moreover, the economic uncertainty resulting from geopolitical factors and the COVID-19 pandemic is shaping customer behavior and financial decision-making in the region. Traditional banks are adapting their strategies to navigate these challenging macroeconomic conditions and maintain customer trust and loyalty.

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.