Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - G7

In the G7 country, China, the Traditional Retail Banking market market is expected to witness a significant increase in Net Interest Income.
According to projections, the Net Interest Income is estimated to reach a staggering US$189.40bn by the year 2024.
Furthermore, the market is anticipated to showcase a Compound Annual Growth Rate (CAGR) of 4.77% from 2024 to 2029.
This growth rate will contribute to a substantial expansion, resulting in a market volume of approximately US$239.10bn by 2029.
In terms of global comparison, China is anticipated to be the leading contributor to Net Interest Income in the Traditional Retail Banking market sector.
It is projected that China will generate US$2,426.0bn in Net Interest Income by the year 2024.
In the United States, traditional retail banking is seeing a decline in branch visits as more customers opt for online and mobile banking services.

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 G7 countries is experiencing significant changes driven by evolving customer preferences, technological advancements, and local special circumstances.

Customer preferences: Customers in G7 countries are increasingly demanding more convenient and personalized banking services. This includes digital banking options, such as mobile apps and online banking, which offer round-the-clock access to accounts and seamless transaction capabilities. Additionally, customers are seeking more efficient ways to manage their finances, leading to a growing interest in automated financial advisory services and budgeting tools.

Trends in the market: In the United States, the Traditional Retail Banking market is seeing a rise in digital-only banks and fintech companies offering innovative solutions to meet the changing needs of customers. These new entrants are challenging traditional banks by providing lower fees, higher interest rates on savings accounts, and user-friendly interfaces. As a result, traditional banks are investing heavily in digital transformation to stay competitive. In Germany, the Traditional Retail Banking market is witnessing a shift towards sustainable banking practices. Customers are increasingly prioritizing environmental and social responsibility, leading banks to offer green investment options and eco-friendly banking products. This trend is driven by a growing awareness of climate change and a desire to support companies with strong ESG (Environmental, Social, and Governance) performance.

Local special circumstances: In Japan, the Traditional Retail Banking market is influenced by the country's aging population and low birth rate. Banks are adapting their services to cater to older customers, such as offering simplified products, larger fonts on statements, and enhanced customer support for retirees. Additionally, the preference for cash transactions in Japan has prompted banks to maintain a wide network of ATMs despite the rise of digital payments.

Underlying macroeconomic factors: In the United Kingdom, the Traditional Retail Banking market is shaped by regulatory changes aimed at increasing competition and consumer protection. Open Banking regulations have paved the way for greater data sharing between banks and third-party providers, leading to the development of innovative financial products and services. This regulatory environment has encouraged collaboration between traditional banks and fintech firms to drive industry growth.

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.