Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Northern Europe

Northern Europe

In Northern Europe, the Traditional Retail Banking market market is expected to witness a significant growth in Net Interest Income.
According to projections, by 2024, the Net Interest Income is anticipated to reach US$24.99bn.
Furthermore, it is estimated that the market will experience a compound annual growth rate (CAGR 2024-2029) of 3.52%, leading to a market volume of US$29.71bn by 2029.
When comparing globally, China is expected to generate the highest Net Interest Income, amounting to US$2,426.0bn in 2024.
In Northern Europe, the traditional retail banking market is experiencing a decline in branch visits as digital banking continues to gain popularity.

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 Northern Europe is experiencing significant changes driven by evolving customer preferences and local special circumstances.

Customer preferences: Customers in Northern Europe are increasingly demanding more digital and convenient banking solutions. This shift is pushing traditional retail banks to invest heavily in online and mobile banking platforms to meet the growing demand for seamless and efficient banking services. Moreover, customers are placing a higher emphasis on personalized services and financial advice, prompting banks to enhance their customer relationship management strategies.

Trends in the market: In countries like Sweden and Denmark, there is a notable trend towards cashless transactions, with a growing number of consumers opting for digital payment methods over traditional cash payments. This trend is reshaping the way retail banks operate, leading to branch closures and an increased focus on digital channels. Additionally, the rise of fintech companies in the region is fostering competition and innovation in the banking sector, forcing traditional banks to adapt and offer more tech-savvy solutions to remain competitive.

Local special circumstances: Northern Europe is known for its strong regulatory environment and high level of digital literacy among its population. These factors have contributed to the rapid adoption of online banking services and digital payment methods in the region. Additionally, the relatively small and interconnected nature of the Northern European countries has led to increased cross-border banking activities, driving banks to offer more international banking services to cater to the needs of their customers.

Underlying macroeconomic factors: The stable economic conditions in Northern Europe, coupled with low interest rates, are influencing the Traditional Retail Banking market in the region. Banks are facing pressure on their margins due to the low interest rate environment, prompting them to explore alternative revenue streams and cost-cutting measures. Moreover, the region's aging population and changing demographic trends are impacting the demand for banking products and services, leading banks to rethink their strategies to attract and retain customers in a competitive market landscape.

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.