Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Philippines

Philippines

In the Philippines, the Traditional Retail Banking market market is expected to witness a significant increase in Net Interest Income.
By 2024, it is projected to reach US$4.32bn.
Looking ahead, this segment is anticipated to showcase a strong compound annual growth rate (CAGR 2024-2029) of 26.28%, resulting in a market volume of US$13.87bn by 2029.
When compared globally, China is expected to generate the highest Net Interest Income, with an estimated value of US$2,426.0bn in 2024.
Traditional retail banking in the Philippines is experiencing a shift towards digitalization and 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

Amidst the dynamic landscape of the Traditional Retail Banking market in the Philippines, several key trends and developments are shaping the industry.

Customer preferences: In the Philippines, customers are increasingly seeking convenience and accessibility in their banking experience. This has led to a growing demand for digital banking services, such as online banking, mobile banking apps, and contactless payment options. Customers are also placing a higher value on personalized services and financial advice tailored to their specific needs and goals.

Trends in the market: One notable trend in the Traditional Retail Banking market in the Philippines is the rapid expansion of digital banking channels. Traditional brick-and-mortar banks are investing heavily in technology to enhance their digital offerings and reach a wider customer base. This shift towards digitalization is not only driven by changing customer preferences but also by the need to stay competitive in a rapidly evolving market.

Local special circumstances: The Philippines is a country with a large unbanked population, presenting both challenges and opportunities for traditional retail banks. To tap into this underserved market segment, banks are exploring innovative ways to increase financial inclusion, such as offering simplified account opening processes, mobile banking solutions, and financial literacy programs. Additionally, the archipelagic nature of the Philippines poses unique challenges in terms of infrastructure and connectivity, prompting banks to adapt their services to cater to customers in remote areas.

Underlying macroeconomic factors: The economic landscape of the Philippines plays a significant role in shaping the Traditional Retail Banking market. Factors such as GDP growth, inflation rates, and government policies impact consumer spending habits, savings rates, and overall demand for banking products and services. As the economy continues to grow and evolve, traditional retail banks in the Philippines must stay agile and responsive to changing macroeconomic conditions to remain competitive in the market.

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.