Banking - Asia

Asia

In 2024, it is projected that the Net Interest Income in the Banking market in Asia will reach a staggering US$7.10tn.
The market is currently dominated by Traditional Banks, with a projected market volume of US$6.03tn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate of 6.46% (CAGR 2024-2028), resulting in a market volume of US$9.12tn by 2028.
When compared globally, the highest Net Interest Income will be generated in China, amounting to US$5,659.0bn in 2024.
In China, the banking market is experiencing a significant shift towards digital banking, with mobile banking becoming increasingly popular among consumers.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. 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.

Structure:

The market consists of two segments:
- The Traditional Banking 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.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises 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.

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 & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Asia has been experiencing significant growth and development in recent years, driven by various factors such as increasing digitalization, changing customer preferences, and favorable regulatory environments.

Customer preferences: Customers in Asia are increasingly demanding more convenient and efficient banking services, leading to a surge in digital banking adoption. Mobile banking apps and online banking platforms have become popular among tech-savvy consumers who value speed and convenience in their financial transactions.

Trends in the market: In countries like China and India, the rise of digital payment platforms and fintech companies has disrupted the traditional banking sector. Consumers are now able to access a wide range of financial services, such as peer-to-peer lending, digital wallets, and robo-advisors, through their smartphones. This trend has forced traditional banks to innovate and improve their digital offerings to stay competitive in the market.

Local special circumstances: In Southeast Asia, the banking market is characterized by a diverse regulatory landscape and varying levels of technological infrastructure. Countries like Singapore and South Korea are leading the way in digital banking innovation, with regulatory sandboxes and government support for fintech startups. On the other hand, developing countries in Southeast Asia are still in the process of modernizing their banking systems to cater to the growing demand for digital financial services.

Underlying macroeconomic factors: The rapid economic growth in Asia, coupled with a rising middle class and increasing urbanization, has created a favorable environment for the banking sector to expand. As more people gain access to banking services and disposable income, the demand for loans, mortgages, and investment products is expected to rise. Additionally, the low interest rate environment in many Asian countries has encouraged borrowing and investment activities, further driving the growth of the banking 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.