Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Nordics

Nordics

In the Nordics, the Traditional Commercial Banking market market is anticipated to witness a significant increase in Net Interest Income, with projections indicating it will reach a substantial amount of US$42.59bn by the year 2024.
Moreover, this segment is expected to exhibit a steady annual growth rate (CAGR 2024-2029) of 3.54%, resulting in a market volume of US$50.68bn by 2029.
When compared globally, it is worth noting that China is expected to generate the highest Net Interest Income, amounting to a staggering US$1,444.0bn in 2024.
In the traditional commercial banking market in the Nordics, Sweden leads the way with its innovative digital banking solutions.

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 Nordics is witnessing notable developments and trends that are shaping the industry in the region.

Customer preferences: Customers in the Nordics are increasingly leaning towards digital banking solutions, favoring convenience and efficiency in their banking experience. This shift in preferences has led traditional commercial banks to invest heavily in digital transformation to meet customer demands for seamless online and mobile banking services.

Trends in the market: One prominent trend in the Traditional Commercial Banking market in the Nordics is the rise of sustainable finance and ESG (Environmental, Social, and Governance) principles. Customers in the region are showing a growing interest in banking with institutions that prioritize sustainability and ethical practices. This trend is driving traditional commercial banks to integrate ESG criteria into their operations and investment decisions, reflecting the values of their environmentally conscious customer base.

Local special circumstances: The Nordic region's strong emphasis on innovation and technology is a key special circumstance shaping the Traditional Commercial Banking market. With a highly digitalized and tech-savvy population, Nordic countries have become breeding grounds for fintech startups and disruptors in the banking sector. This dynamic environment is pushing traditional commercial banks to adapt and innovate rapidly to stay competitive and retain market share.

Underlying macroeconomic factors: The stable economic conditions in the Nordics, coupled with low interest rates, are influencing the Traditional Commercial Banking market in the region. Traditional banks are facing margin pressures due to the prolonged low-rate environment, prompting them to explore new revenue streams and cost-cutting measures. Additionally, the regulatory landscape in the Nordics, known for its stringent financial regulations and consumer protections, is also shaping the strategies and operations of traditional commercial 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.