Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Bhutan

Bhutan

In Bhutan, the Traditional Retail Banking market market is anticipated to witness a significant growth in Net Interest Income, with projections indicating a reach of US$195.40m by the year 2024.
Moreover, this sector is expected to exhibit a promising annual growth rate (CAGR 2024-2029) of 5.86%, leading to a market volume of US$259.80m by 2029.
When compared globally, it is noteworthy that China will generate the highest Net Interest Income, projected to be US$2,426.0bn in 2024.
Despite being a small and predominantly rural country, Bhutan's traditional retail banking sector is witnessing a gradual shift towards digital services to cater to the growing urban population.

Key regions: France, Brazil, Germany, United Kingdom, United States

Definition:
Traditional retail banking refers to the financial services sector that provides a range of financial products and services to individual consumers through store-based branches and other traditional channels. These services include personal loans, savings and checking accounts, credit cards, mortgages, and other financial products designed specifically for individual consumers.
Traditional retail 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.
Despite facing increased competition and changing customer preferences, traditional retail banks continue to play a vital role in the financial landscape. They are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services.
Overall, traditional retail banking provides a wide range of financial services to individual consumers through established, trusted channels and continues to be an important part of the financial landscape.

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., Bank of America Corp., and BNP Paribas.

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Analyst Opinion

The Traditional Retail Banking market in Bhutan is showing interesting developments in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in Bhutan are increasingly looking for convenience and efficiency in their banking services, driving the demand for digital banking solutions. With the younger population becoming more tech-savvy, there is a growing preference for online and mobile banking options that offer flexibility and accessibility. This shift in customer behavior is pushing traditional banks to innovate and digitize their services to meet the evolving needs of their clientele.

Trends in the market: One notable trend in the Traditional Retail Banking market in Bhutan is the expansion of branch networks in rural areas. Despite the rise of digital banking, there is still a significant portion of the population in remote regions that prefer face-to-face interactions when it comes to banking. As a result, banks are focusing on increasing their physical presence in these areas to cater to the needs of customers who value in-person service. This trend highlights the importance of maintaining a balance between digital offerings and traditional banking services to effectively serve diverse customer segments in Bhutan.

Local special circumstances: Bhutan's unique geographical landscape and cultural considerations play a significant role in shaping the Traditional Retail Banking market. The country's mountainous terrain and scattered population present challenges in terms of accessibility to banking services, especially in rural areas. Additionally, Bhutan's emphasis on Gross National Happiness (GNH) as a development indicator influences the banking sector to prioritize customer satisfaction and well-being over purely profit-driven motives. This focus on holistic well-being and community welfare sets Bhutan's banking market apart from others in the region, leading to a more personalized approach to customer service and product offerings.

Underlying macroeconomic factors: The economic growth and stability in Bhutan contribute to the positive outlook for the Traditional Retail Banking market. As the country continues to experience steady economic development and increasing disposable incomes, there is a growing demand for a wide range of banking products and services. This favorable macroeconomic environment provides opportunities for banks to expand their operations, introduce innovative financial solutions, and enhance overall customer experience in the evolving retail banking landscape of Bhutan.

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.