Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Malaysia

Malaysia

In Malaysia, the Traditional Retail Banking market market is anticipated to witness a significant growth in Net Interest Income, with a projected value of US$6.07bn in 2024.
Looking ahead, this sector is expected to maintain a steady annual growth rate of 1.03% (CAGR 2024-2029), ultimately reaching a market volume of US$6.39bn by 2029.
When compared globally, it is worth noting that China is expected to generate the highest Net Interest Income, with a staggering US$2,426.0bn in 2024.
As Malaysia continues to embrace digital transformation, traditional retail banking in the country is experiencing a decline in customer footfall and a shift towards online 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 Malaysia is experiencing a shift in customer preferences, trends, and local special circumstances.

Customer preferences: Customers in Malaysia are increasingly seeking convenience and personalized services in their banking experiences. This has led to a growing demand for digital banking solutions and mobile banking applications that offer ease of access and efficient transactions.

Trends in the market: One notable trend in the Traditional Retail Banking market in Malaysia is the rise of digital banks and fintech companies. These new players are challenging traditional banks by offering innovative products and services tailored to the digital-savvy Malaysian population. Additionally, there is a growing trend towards sustainable and socially responsible banking practices, with customers showing interest in banks that prioritize environmental and social impact.

Local special circumstances: Malaysia's diverse population and strong cultural influences play a significant role in shaping the Traditional Retail Banking market. Islamic banking, which complies with Shariah principles, is a key component of the banking sector in Malaysia, catering to the needs of Muslim customers. This unique aspect sets Malaysia apart from other markets and drives the demand for Shariah-compliant banking products.

Underlying macroeconomic factors: The economic growth and increasing disposable income in Malaysia are driving the expansion of the Traditional Retail Banking market. As more Malaysians enter the middle-class segment, there is a greater demand for a wide range of banking products and services. Additionally, the government's initiatives to promote financial inclusion and digitalization further support the growth of the banking sector in Malaysia.

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.