Banking - Israel

Israel

In 2024, the projected Net Interest Income in the Banking market of Israel is expected to reach US$40.70bn.
Traditional Banks are set to dominate the market with a projected market volume of US$37.95bn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate (CAGR 2024-2028) of -3.21%.
This growth rate will result in a market volume of US$35.72bn by 2028.
When comparing globally, it is noteworthy that in China is expected to generate the highest Net Interest Income, amounting to US$5,659.0bn in 2024.
In Israel, the banking market is experiencing a shift towards digital banking, with an increasing number of customers opting for mobile and online 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

In Israel, the Banking market is experiencing significant growth and evolution.

Customer preferences: Customers in Israel are increasingly gravitating towards digital banking solutions, favoring convenience and efficiency in their banking transactions. The demand for online and mobile banking services has been on the rise, driving banks to invest in technological advancements to meet customer expectations.

Trends in the market: One notable trend in the Israeli Banking market is the emergence of fintech companies offering innovative financial solutions. These fintech firms are challenging traditional banks by providing alternative payment methods, peer-to-peer lending platforms, and personalized financial management tools. This trend is reshaping the competitive landscape and pushing traditional banks to adapt and collaborate with fintech players to stay relevant.

Local special circumstances: Israel's unique position as a global hub for technology and innovation is influencing the Banking market. The country's reputation for technological advancements has created a fertile ground for the development and adoption of cutting-edge banking technologies. Israeli banks are leveraging this ecosystem to drive innovation in their services and enhance the overall customer experience.

Underlying macroeconomic factors: The stability of Israel's economy and its strong regulatory framework have contributed to the growth of the Banking market. Favorable government policies and initiatives to promote competition and consumer protection have fostered a healthy banking sector. Additionally, the country's robust cybersecurity measures have instilled trust and confidence in digital banking solutions, further fueling market growth.

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.