Traditional Commercial Banking - Europe

In Europe, the Traditional Commercial Banking market market is expected to witness significant growth.
It is projected that the Net Interest Income in this market will reach US$530.00bn by 2024.
Looking ahead, there is an expected annual growth rate (CAGR 2024-2029) of 2.13%, which will result in a market volume of US$588.80bn by 2029.
When comparing these figures globally, it is noteworthy that China will generate the highest Net Interest Income in 2024, amounting to US$1.4tn.
In Europe, traditional commercial banking in Germany remains highly conservative, with a strong focus on relationship banking and risk aversion.

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

Structure:

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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Traditional Commercial Banking (B2B)

Neobanking
Traditional Retail Banking
Interbank Market
Government Banking

One of the key trends in the traditional commercial banking market is the shift towards digitalization. With the increasing use of technology in everyday life, businesses are demanding faster, more efficient, and more convenient banking services. This has led to the development of new digital banking products and services, such as mobile banking apps, online payment platforms, and automated accounting tools. The use of advanced analytics and artificial intelligence is also transforming the way commercial banks operate, enabling them to better manage risk, improve customer service, and identify new business opportunities.

Another trend is the growing importance of sustainability and corporate social responsibility. Businesses are increasingly concerned about their operations' environmental and social impact and seek out banking partners that share their values. Commercial banks are responding by developing sustainable finance products, such as green bonds and sustainable investment funds, and by integrating environmental, social, and governance (ESG) criteria into their lending and investment decisions.

Traditional banks face increasing competition from fintech companies and other non-bank financial institutions offering innovative products and services. These new players are leveraging technology to disrupt traditional banking models, and are often more nimble and adaptable than their established counterparts. Traditional banks are responding by investing in digital technology, partnering with fintech companies, and exploring new business models.

In terms of regional trends, the commercial banking market is experiencing significant growth in emerging markets such as Asia, Africa, and Latin America. These regions are seeing a rapid expansion of the middle class, as well as increasing demand for infrastructure investment and other commercial activities. Commercial banks are responding by expanding their presence in these markets and developing specialized products and services to meet the needs of local businesses.

Additionally, the peak of inflation in 2022 affected the market. For more details about the impacts of inflation on the financial industry read more here.

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.

The United States banking sector is home to some of the most influential financial institutions globally, with four dominant players leading the industry. JPMorgan Chase, Bank of America, Wells Fargo, and Citibank not only dominate the U.S. market but also rank among the top seven largest banks worldwide by market capitalization.