Traditional Banks - Thailand

Thailand

In 2024, it is projected that the net interest income in the Traditional Banks market market in Thailand will reach US$11.76bn.
Traditional Commercial Banking dominates this market segment with a projected market volume of US$8.02bn in 2024.
Looking ahead, the net interest income is expected to exhibit an annual growth rate of 4.35% from 2024 to 2029, resulting in a market volume of US$14.55bn by 2029.
When compared globally, it is worth noting that China will generate the highest net interest income, amounting to US$3,869.0bn in 2024.
Traditional banks in Thailand are facing increasing competition from digital banking platforms, forcing them to adapt and innovate to stay relevant in the market.

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

Amidst the dynamic landscape of the financial sector in Thailand, the Traditional Banks market is witnessing notable trends and developments.

Customer preferences: Thai consumers still exhibit a strong inclination towards traditional banking services provided by brick-and-mortar banks. Despite the rise of digital banking, many customers in Thailand value the personalized services, face-to-face interactions, and established reputation offered by traditional banks.

Trends in the market: One prominent trend in the Traditional Banks market in Thailand is the strategic expansion of physical branches to rural areas. Traditional banks are increasingly focusing on reaching out to untapped markets outside major urban centers, aiming to cater to the financial needs of a broader customer base. This trend aligns with the cultural preference for in-person banking experiences in Thailand.

Local special circumstances: In Thailand, cultural norms and values play a significant role in shaping the banking landscape. The concept of "face" or social reputation is crucial in Thai society, influencing individuals' trust in established traditional banks. This emphasis on trust and reputation often leads consumers to choose traditional banks over newer digital alternatives.

Underlying macroeconomic factors: The stability of Thailand's economy and regulatory environment also contributes to the strength of the Traditional Banks market. With a well-regulated banking sector and steady economic growth, traditional banks in Thailand enjoy a level of trust and reliability that resonates with the cautious approach many Thai consumers take towards financial matters. Additionally, the government's initiatives to promote financial inclusion and literacy further support the growth of traditional banks 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.