Banking - Canada

Canada

In 2024, the Net Interest Income in the Banking market in Canada is projected to reach US$98.49bn.
Traditional Banks are expected to dominate the market with a projected market volume of US$87.48bn in the same year.
Looking ahead, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2028) of 4.67%, resulting in a market volume of US$118.20bn by 2028.
It is worth noting that in global comparison, in China is expected to generate the highest Net Interest Income, with US$5,659.0bn in 2024.
Canada's banking market is experiencing a rise in digital banking solutions, as consumers increasingly prefer the convenience and accessibility of online and mobile banking services.

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 Canada has been experiencing significant developments and trends in recent years.

Customer preferences: Customers in Canada are increasingly seeking digital banking solutions that offer convenience and accessibility. The preference for online and mobile banking services has been on the rise, driven by the tech-savvy population and the need for efficient financial transactions.

Trends in the market: One notable trend in the Canadian banking market is the emergence of fintech companies offering innovative financial products and services. These fintech firms are challenging traditional banks by providing alternative solutions such as peer-to-peer lending, digital wallets, and robo-advisors. This trend is reshaping the competitive landscape and driving traditional banks to invest in digital transformation.

Local special circumstances: Canada's highly concentrated banking sector, dominated by a few major banks, presents a unique challenge for new entrants and smaller players. The market is characterized by strong regulatory oversight and stability, which can make it difficult for disruptive fintech startups to gain significant market share. However, the evolving regulatory environment is gradually opening up opportunities for increased competition and innovation.

Underlying macroeconomic factors: The stable economic environment in Canada, coupled with low interest rates, has influenced consumer behavior and investment patterns in the banking sector. As the country navigates through periods of economic uncertainty, banks are focusing on risk management and diversification of their product offerings to cater to changing customer needs. Additionally, demographic shifts, such as an aging population and increasing diversity, are shaping the demand for tailored banking services and wealth management solutions in the Canadian 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.