Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - South Korea

South Korea

In South Korea, the Traditional Commercial Banking market market is expected to witness a significant growth in its Net Interest Income.
According to projections, the Net Interest Income is set to reach a substantial amount of US$69.59bn in 2024.
Furthermore, this sector is anticipated to demonstrate a steady annual growth rate of 5.48% (CAGR 2024-2029), resulting in a market volume of US$90.87bn by 2029.
It is worth noting that in comparison to other countries, China is projected to generate the highest Net Interest Income in the year 2024, amounting to a staggering US$1,444.0bn.
South Korea's traditional commercial banking sector is experiencing a surge in digital transformation, as banks adopt innovative technologies to enhance customer experience and streamline operations.

Key regions: China, France, Brazil, Singapore, India

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

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

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Analyst Opinion

The Traditional Commercial Banking market in South Korea is experiencing significant growth and transformation in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in South Korea are increasingly seeking convenience, efficiency, and personalized services from traditional commercial banks. With the rise of digital banking and fintech solutions, customers are looking for seamless online and mobile banking experiences, as well as innovative products and services tailored to their individual needs.

Trends in the market: One prominent trend in the Traditional Commercial Banking market in South Korea is the shift towards digitalization and technology adoption. Traditional banks are investing heavily in digital transformation to enhance customer experience, streamline operations, and stay competitive in the market. Moreover, partnerships between traditional banks and fintech companies are becoming more common, leading to the development of new products and services that cater to evolving customer demands.

Local special circumstances: South Korea's unique market dynamics, characterized by a tech-savvy population and a highly developed digital infrastructure, are driving the rapid evolution of the Traditional Commercial Banking sector. The country's strong regulatory environment and government support for innovation are also contributing to the growth of the market. Additionally, the presence of large conglomerates, known as chaebols, influences the banking landscape and competition among traditional banks.

Underlying macroeconomic factors: The Traditional Commercial Banking market in South Korea is further influenced by macroeconomic factors such as economic growth, interest rates, and regulatory policies. As the economy continues to expand, there is a growing demand for banking services to support businesses and consumers. Interest rate fluctuations and regulatory changes also impact the profitability and operations of traditional banks, shaping their strategies and offerings 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.