Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - G7

In the Traditional Commercial Banking market market, Net Interest Income is forecasted to reach US$0.73tn in 2024.
It is expected to exhibit an annual growth rate (CAGR 2024-2029) of 2.35%, leading to a market volume of US$0.82tn by 2029.
When compared globally, the majority of Net Interest Income will be generated China, with an estimated value of US$1,444.0bn in 2024.
This figure highlights China's dominance in the Traditional Commercial Banking market sector within the G7 countries.
In the United States, traditional commercial banking is shifting towards digital platforms to accommodate the growing demand for online banking services.

Key regions: China, France, Brazil, Singapore, India

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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Analyst Opinion

The Traditional Commercial Banking market in G7 countries is experiencing notable trends and developments driven by various factors.

Customer preferences: Customers in G7 countries are increasingly gravitating towards traditional commercial banking services due to the stability and reliability they offer. With a strong emphasis on security and trust, customers prefer the established reputation and long-standing history of traditional banks in safeguarding their assets and providing a wide range of financial products and services.

Trends in the market: In the United States, there is a growing trend towards digital transformation in traditional commercial banking, with banks investing heavily in technology to enhance customer experience and streamline operations. In Japan, traditional banks are focusing on personalized services to cater to the needs of an aging population. In Germany, there is a trend towards sustainable banking practices, with traditional banks incorporating environmental and social considerations into their operations.

Local special circumstances: In the United Kingdom, the traditional commercial banking sector is facing increased competition from challenger banks and fintech companies, leading to innovation and new service offerings. In Canada, traditional banks are expanding their presence in rural areas to serve a diverse customer base. In France, traditional banks are adapting to changing regulatory requirements and increasing digitalization in the industry.

Underlying macroeconomic factors: The stable economic growth and low interest rate environment in G7 countries are influencing the traditional commercial banking market. Additionally, regulatory changes and compliance requirements are shaping the way traditional banks operate and offer services to customers. The ongoing impact of global events, such as the COVID-19 pandemic, is also driving digital transformation and changing customer behavior in the traditional commercial banking sector.

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.