Digital Banks - Sweden

Sweden

In Sweden, the Digital Banks market market is expected to see a significant increase in Net Interest Income.
By 2024, it is projected to reach US$10.33bn.
Looking ahead, there is further growth expected with an annual growth rate (CAGR 2024-2028) of 11.19%.
This will result in a market volume of US$15.79bn by 2028.
When comparing globally, it is interesting to note that in China will generate the highest Net Interest Income.
In 2024, it is estimated to be US$969,200.0m.
This showcases the dominance of the US market in terms of generating Net Interest Income in the Digital Banks market sector.
Sweden's digital banking market is experiencing a surge in adoption as tech-savvy consumers embrace the convenience and security of online banking services.

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

Definition:

Digital Banks refer to the emerging market for purely digital banks that offer financial services via online and mobile platforms. Unlike traditional banks, digital banks also known as neobanks, do not have store-based branches and instead rely on technology to deliver their services. But in contrast to digital-only direct banks, which focus on providing traditional banking services in an online format, the digital banks/neobanks covered in this analysis prioritize cutting-edge features and a modern user experience.
Digital Banks offer a wide range of financial products and services, including savings and checking accounts, credit cards, personal loans, and investment products, among others. They aim to provide a more convenient, accessible, and user-friendly banking experience by leveraging technology such as mobile apps and artificial intelligence. They also provide a digital identification and onboarding process, often via smartphone.
The Digital Banks market is growing rapidly as consumers increasingly demand more convenient, digitally focused financial services. Neobanks/Digital Banks are able to offer these services at a lower cost compared to traditional banks, as they have lower overhead costs and a more efficient operating model.
However, digital banks face challenges in building trust and establishing their reputation in the financial services industry. They must also navigate the complex regulatory landscape and comply with the same rules and standards as traditional banks.
Overall, the Digital Banks market represents a growing and exciting opportunity for financial services providers to deliver innovative and convenient solutions to consumers.

Structure:

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income as well as the number of ATMs.

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 Bunq, Tomorrow, and Revolut.

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Analyst Opinion

The Digital Banks market in Sweden has been experiencing significant growth and innovation in recent years.

Customer preferences: Customers in Sweden are increasingly gravitating towards digital banking solutions due to their convenience, accessibility, and efficiency. The tech-savvy population in the country values the ease of use and round-the-clock availability offered by digital banks.

Trends in the market: One notable trend in the Swedish digital banking market is the rise of neobanks, which are fintech companies that operate exclusively online without any physical branches. These neobanks often offer competitive interest rates, low fees, and innovative financial management tools, attracting a younger demographic of customers.

Local special circumstances: Sweden's strong focus on sustainability and environmental responsibility has also influenced the digital banking market in the country. Many digital banks in Sweden prioritize green initiatives and offer services that align with the population's eco-conscious values.

Underlying macroeconomic factors: The high level of digital infrastructure and internet penetration in Sweden has laid a solid foundation for the growth of digital banks in the country. Additionally, the government's support for innovation and technology development has created a conducive environment for digital banking startups to thrive in Sweden's competitive financial services sector.

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.