Banking - South America

South America

In 2024, the projected Net Interest Income in the Banking market in South America is estimated to reach US$401.20bn.
The market is currently dominated by Traditional Banks, with a projected market volume of US$279.80bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit a compound annual growth rate (CAGR) of 3.17% from 2024 to 2028, resulting in a market volume of US$454.50bn by 2028.
It is worth noting that, in a global comparison, in China is expected to generate the highest Net Interest Income, amounting to US$5,659.0bn in 2024.
In South America's banking market, digital banking services are rapidly gaining popularity, with a growing number of customers opting for online and mobile banking solutions.

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 South America is experiencing significant growth and development driven by various factors.

Customer preferences: Customers in South America are increasingly seeking digital banking solutions due to the convenience and accessibility they offer. Mobile banking apps and online banking platforms are becoming more popular as customers look for ways to easily manage their finances on-the-go. Additionally, there is a growing demand for personalized banking services tailored to individual needs and preferences.

Trends in the market: In Brazil, one of the largest economies in South America, there is a trend towards consolidation in the banking sector. Larger banks are acquiring smaller banks to expand their market share and offer a wider range of services to customers. This trend is driven by the desire to achieve economies of scale and enhance competitiveness in the market.

Local special circumstances: In Argentina, economic instability and high inflation rates have had a significant impact on the banking sector. Banks in Argentina are facing challenges in terms of managing risk and maintaining profitability in a volatile economic environment. As a result, there is a growing focus on risk management strategies and diversification of revenue streams to mitigate the impact of economic uncertainties.

Underlying macroeconomic factors: The overall economic growth in South America, coupled with increasing urbanization and a rising middle class, is driving the expansion of the banking market in the region. As more people gain access to financial services, there is a growing need for banks to innovate and adapt to changing customer preferences. Additionally, regulatory reforms and initiatives to promote financial inclusion are shaping the future of the banking sector in South America.

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.