Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - BRICS

BRICS

In the Traditional Retail Banking market market, it is estimated that the Net Interest Income for BRICS countries will reach US$2.76tn by 2024.
Looking ahead, the Net Interest Income is projected to demonstrate a Compound Annual Growth Rate (CAGR) of 5.16% during the period of 2024-2029, which will lead to a market volume of US$3.55tn by 2029.
When considering the global landscape, China is expected to generate the highest Net Interest Income, amounting to US$2,426.0bn in 2024.
In Brazil, traditional retail banking is facing increasing competition from digital banks, forcing established institutions to adapt and innovate.

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 BRICS countries is experiencing dynamic changes driven by shifting customer preferences, evolving market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in BRICS countries are increasingly seeking personalized and convenient banking services. They prefer seamless digital banking experiences, including online account management, mobile banking apps, and contactless payment options. Moreover, there is a growing demand for value-added services such as financial advisory, investment opportunities, and rewards programs to enhance the overall banking experience.

Trends in the market: In Brazil, there is a trend towards banks expanding their physical branch networks to reach untapped rural areas while also investing in digital banking solutions to cater to urban customers' evolving needs. In Russia, traditional banks are facing competition from digital-only banks offering innovative services and competitive interest rates, prompting traditional banks to enhance their digital offerings. In India, the market is witnessing a surge in digital payment adoption, leading traditional banks to invest in fintech partnerships and technology upgrades to stay competitive. In China, traditional banks are leveraging big data and AI to personalize services and improve customer engagement, particularly among tech-savvy younger generations.

Local special circumstances: In South Africa, traditional banks are focusing on financial inclusion initiatives to serve unbanked populations in remote areas, driving the adoption of mobile banking and agent banking services. In addition, regulatory changes and government initiatives are shaping the competitive landscape of the traditional retail banking market in BRICS countries, influencing market entry barriers, product offerings, and pricing strategies.

Underlying macroeconomic factors: Economic growth, demographic shifts, regulatory reforms, and technological advancements are key macroeconomic factors influencing the traditional retail banking market in BRICS countries. As these economies continue to develop and urbanize, the demand for banking services is expected to grow, presenting opportunities for traditional banks to innovate and expand their market presence. Additionally, factors such as inflation rates, interest rates, and currency fluctuations can impact consumer spending habits, savings behavior, and investment decisions, influencing the overall performance of the traditional retail banking sector in BRICS.

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.