Traditional Banks - South America

South America

In 2024, the projected Net Interest Income in the Traditional Banks market market in South America is expected to reach US$218.20bn.
Traditional Commercial Banking dominates this market segment with a projected market volume of US$116.00bn in the same year.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 0.43%, resulting in a market volume of US$222.90bn by 2029.
It is worth noting that in a global comparison, the highest amount of Net Interest Income is anticipated to be generated in China, amounting to US$3,869.0bn in 2024.
Traditional banks in South America are facing increasing competition from digital banking platforms, forcing them to innovate and enhance their online services.

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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Currency

Analyst Opinion

The Traditional Banks market in South America has been experiencing notable trends and developments in recent years.

Customer preferences: Customers in South America have shown a strong preference for traditional banking services, valuing the security and stability offered by established brick-and-mortar banks. Many customers in the region prioritize in-person interactions with bank representatives and prefer to conduct their banking transactions at physical branches rather than online.

Trends in the market: In countries like Brazil, traditional banks have been investing heavily in digital transformation to meet the evolving needs of customers and stay competitive in the market. This has led to the development of innovative digital banking solutions and the expansion of online banking services. Additionally, there has been a trend towards offering personalized financial products and services to cater to the diverse needs of customers in South America.

Local special circumstances: Political and economic instability in certain South American countries have had an impact on the Traditional Banks market. In countries like Argentina and Venezuela, high inflation rates and currency devaluation have posed challenges for banks operating in the region. This has forced traditional banks to adapt their strategies and offerings to navigate the volatile economic landscape.

Underlying macroeconomic factors: Macroeconomic factors such as GDP growth, inflation rates, and interest rates play a significant role in shaping the Traditional Banks market in South America. Economic stability and growth can lead to increased consumer confidence and higher demand for banking services. On the other hand, economic downturns can result in reduced lending activity and lower profitability for traditional banks in the region.

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.