Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Saudi Arabia

Saudi Arabia

In Saudi Arabia, the Traditional Retail Banking market market is expected to witness a significant growth in Net Interest Income, reaching US$17.91bn in 2024.
Furthermore, a steady annual growth rate (CAGR 2024-2029) of 4.66% is anticipated, which will lead to a market volume of US$22.49bn by 2029.
When compared globally, it is worth noting that China will generate the highest Net Interest Income, with an estimated value of US$2,426.0bn in 2024.
Traditional Retail Banking in Saudi Arabia is experiencing a surge in digital banking adoption, with customers increasingly using online and mobile banking services for their daily banking needs.

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

Traditional Retail Banking in Saudi Arabia is experiencing significant developments and trends in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in Saudi Arabia are increasingly seeking convenience, efficiency, and personalized services in their banking experience. This has led to a growing demand for digital banking solutions, such as online banking platforms and mobile applications, which offer 24/7 access to banking services. Additionally, customers are placing a higher emphasis on security and transparency in their banking transactions, driving banks to invest in robust cybersecurity measures to protect customer data.

Trends in the market: One prominent trend in the Traditional Retail Banking market in Saudi Arabia is the shift towards branch digitization and automation. Banks are investing in self-service kiosks, interactive ATMs, and digital banking lounges to enhance the customer experience and streamline routine transactions. Another notable trend is the increasing adoption of Islamic banking products, in line with the country's adherence to Islamic principles. This has led to the development of a wide range of Sharia-compliant banking products and services to cater to this growing segment of the market.

Local special circumstances: Saudi Arabia's Vision 2030 initiative, aimed at diversifying the economy and reducing dependence on oil, is driving innovation and growth in the banking sector. As the government pushes for digital transformation across industries, banks in the country are embracing technology to meet the evolving needs of customers and stay competitive in the market. Additionally, the young and tech-savvy population in Saudi Arabia is driving the demand for digital banking solutions, pushing banks to innovate and adapt to changing consumer preferences.

Underlying macroeconomic factors: The stable economic environment and strong regulatory framework in Saudi Arabia have created a conducive environment for the growth of the Traditional Retail Banking market. Additionally, the government's efforts to promote financial inclusion and increase access to banking services have expanded the customer base for banks in the country. Overall, the combination of favorable macroeconomic factors and evolving customer preferences is shaping the future of the Traditional Retail Banking market in Saudi Arabia.

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.