Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Southern Europe

Southern Europe

In Southern Europe, the Traditional Retail Banking market market is expected to reach a projected Net Interest Income of US$33.51bn in 2024.
Looking ahead, this market segment is anticipated to exhibit an annual growth rate (CAGR 2024-2029) of -2.16%, leading to a market volume of US$30.05bn by 2029.
When comparing globally, it is noteworthy that China is projected to generate the highest Net Interest Income, with a forecasted amount of US$2,426.0bn in 2024.
In Southern Europe, traditional retail banking in Italy is facing increasing competition from digital banking platforms.

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 Southern Europe is experiencing notable trends and developments driven by various factors.

Customer preferences: Customers in Southern Europe are increasingly seeking convenience and personalized services in their banking experiences. They are gravitating towards digital banking solutions that offer ease of access, such as mobile banking apps and online account management. Additionally, there is a growing demand for tailored financial products that cater to individual needs and preferences.

Trends in the market: In countries like Spain and Italy, there is a noticeable shift towards branch consolidation and digital transformation in the traditional retail banking sector. Banks are streamlining their physical presence while investing in technology to enhance customer experience and operational efficiency. Moreover, there is a rise in partnerships between traditional banks and fintech companies to offer innovative services like peer-to-peer payments and robo-advisory.

Local special circumstances: Southern Europe faces unique challenges such as economic volatility and regulatory changes that impact the traditional retail banking market. Countries like Greece and Portugal, which have undergone financial crises in the past, are focusing on rebuilding trust in the banking sector and implementing stricter regulations to ensure stability. Cultural factors also play a role, as preferences for in-person interactions and relationship-based banking still hold significance in some regions.

Underlying macroeconomic factors: The economic landscape in Southern Europe, characterized by low interest rates and slow economic growth, is influencing the traditional retail banking market. Banks are adapting their business models to navigate the low-interest environment and exploring new revenue streams beyond traditional lending practices. Additionally, demographic shifts such as an aging population and changing consumer behaviors are shaping the demand for banking services in the region.

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.