The Traditional Commercial Banking market in Latvia is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.
Customer preferences: Customers in Latvia are increasingly seeking digital banking solutions that offer convenience and efficiency. The demand for online banking services, mobile banking apps, and digital payment options is on the rise as customers look for ways to manage their finances seamlessly. Additionally, customers are placing a greater emphasis on personalized services and tailored financial products that meet their specific needs and preferences.
Trends in the market: One of the prominent trends in the Traditional Commercial Banking market in Latvia is the increasing competition from fintech companies. These innovative and agile firms are disrupting the market with their technology-driven solutions, attracting a younger demographic of customers who are drawn to their user-friendly interfaces and innovative features. Traditional banks are responding by investing in digital transformation and partnering with fintech firms to enhance their service offerings and stay competitive.
Local special circumstances: Latvia's banking sector has been undergoing significant regulatory changes in recent years to strengthen transparency and combat money laundering and financial crime. The implementation of stricter regulations and compliance requirements has had a profound impact on the operations of traditional banks in the country, leading to increased scrutiny and a focus on enhancing risk management practices. This has created a challenging environment for banks to navigate, requiring them to adapt their business models and processes to comply with regulatory standards.
Underlying macroeconomic factors: The economic landscape in Latvia, characterized by steady GDP growth and low inflation rates, is influencing the development of the Traditional Commercial Banking market. As the economy continues to expand, there is a growing demand for banking services to support businesses and individuals in their financial activities. This presents opportunities for traditional banks to innovate and diversify their product offerings to cater to the evolving needs of customers in a dynamic market environment.
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.
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