Traditional Banks - Europe

Europe

In 2024, the projected Net Interest Income in the Traditional Banks market market of Europe is estimated to reach €0.74tn.
Traditional Commercial Banking is expected to dominate the market with a projected market volume of €0.49tn in the same year.
The Net Interest Income is anticipated to display an annual growth rate of 2.07% (CAGR 2024-2029), resulting in a market volume of €0.82tn by 2029.
When compared globally, China is projected to generate the highest Net Interest Income of €3,551.0bn in 2024.
In Germany, traditional banks are facing increased competition from digital banks, leading to a shift in customer preferences.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These 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.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

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., JPMorgan Chase & Co., and HSBC Holdings.

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Mercado

Región

Comparación de regiones

Moneda

Analyst Opinion

The market is primarily driven by the rising demand for banking services in emerging economies, increasing investments in digital banking solutions, and the adoption of innovative technologies such as artificial intelligence (AI), blockchain, and big data analytics.

In terms of regional analysis, North America holds the largest share of the traditional banking market due to the presence of major banks such as JPMorgan Chase, Bank of America, and Wells Fargo. Europe and Asia Pacific are also significant markets for traditional banking services, with countries like the UK, Germany, Japan, China, and India being the key contributors to market growth.

The global Traditional Banks market is highly fragmented and dominated by a few major players. Some of the leading traditional banks worldwide include JPMorgan Chase, Bank of America, Citigroup, HSBC Holdings, and Wells Fargo. These banks have a strong presence in multiple regions and offer a wide range of financial products and services to their customers.

However, traditional banks are facing stiff competition from new entrants in the market such as fintech startups and digital banks. These companies are leveraging technology to offer consumers innovative and convenient banking solutions, disrupting the traditional banking model. To stay competitive, traditional banks are investing heavily in digital transformation initiatives, such as mobile banking apps, online banking portals, and chatbots to enhance the customer experience and improve operational efficiency.

Moreover, the COVID-19 pandemic has further accelerated the shift towards digital banking, as customers increasingly prefer contactless and online banking solutions. According to a report by McKinsey & Company, digital adoption in banking has advanced by several years in a matter of months due to the pandemic. Traditional banks are now investing in technologies such as AI and machine learning to provide personalized banking experiences, reduce fraud and cybersecurity risks, and automate manual processes.

In conclusion, the global traditional banking market is a dynamic and competitive industry that continues to evolve with changing customer needs and technological advancements. While traditional banks face increasing competition from new entrants in the market, they are adapting to the changing landscape by investing in digital transformation initiatives and leveraging innovative technologies to provide better customer experiences and improve operational efficiency.

Additionally, the peak of inflation in 2022 affected the market. For more details about the impacts of inflation on the financial industry read more here.

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. The scenario analysis is based on a Monte Carlo simulation approach generating a range of possible outcomes by creating random variations in forecasted data points, based on assumptions about potential fluctuations in future values. By running numerous simulated scenarios, the model provides an estimated distribution of results, allowing for an analysis of likely ranges and confidence intervals around the forecast.

Additional Notes:

The market is updated twice per year in case market dynamics change.