Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Southeast Asia

Southeast Asia

In Southeast Asia, the Traditional Retail Banking market market is forecasted to achieve a Net Interest Income of US$76.74bn by 2024.
This figure is projected to experience an annual growth rate of 2.49% (CAGR 2024-2029), leading to a market volume of US$86.78bn by 2029.
It is worth noting that when compared globally, in China is expected to generate the highest Net Interest Income, amounting to US$2,426.0bn in 2024.
In Southeast Asia, traditional retail banking is facing stiff competition from digital banking platforms, leading to a decline in customer footfall at brick-and-mortar branches.

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 Southeast Asia is experiencing significant growth and evolution, driven by various factors shaping the industry in the region.

Customer preferences: Customers in Southeast Asia are increasingly demanding convenient and personalized banking services. They prefer seamless digital banking experiences, including online account management, mobile banking apps, and digital payment solutions. This shift in preferences is pushing traditional banks to invest in technology and innovation to stay competitive and meet customer expectations.

Trends in the market: In Indonesia, there is a growing trend of traditional banks partnering with fintech companies to offer a wider range of services and reach a larger customer base. This collaboration allows banks to tap into the tech-savvy population while fintech firms benefit from the banks' established infrastructure and regulatory compliance.

Local special circumstances: In Singapore, the government's push towards becoming a Smart Nation is driving the adoption of digital banking services. Traditional banks in the country are investing heavily in digital transformation to cater to the tech-savvy population and compete with digital-only banks entering the market. Moreover, the high internet penetration rate and tech-friendly environment in Singapore are further accelerating the shift towards digital banking.

Underlying macroeconomic factors: The economic growth and rising middle-class population in countries like Thailand and Malaysia are contributing to the expansion of the Traditional Retail Banking market. As more people enter the banking system, there is a growing demand for a wide range of banking products and services, including loans, savings accounts, and investment options. This presents a significant opportunity for traditional banks to expand their customer base and increase their market share in these countries.

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.