Banking - Southeast Asia

Southeast Asia

In Southeast Asia, the projected Net Interest Income in the Banking market is expected to reach a staggering US$148.70bn by the year 2024.
The market is currently dominated by Traditional Banks, which are projected to have a market volume of US$133.50bn in 2024.
Looking ahead, the Net Interest Income is anticipated to exhibit a compound annual growth rate (CAGR 2024-2029) of 3.24%, resulting in a market volume of US$174.40bn by the year 2029.
When compared globally, it is noteworthy that in China is expected to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
The Banking market sector in Southeast Asia demonstrates promising growth potential within this market segment.
In Southeast Asia, the banking market in Singapore is witnessing a shift towards digital banking services, with a focus on seamless online transactions and personalized customer experiences.

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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Market

Region

Region comparison

Currency

Analyst Opinion

In Southeast Asia, the Banking market is experiencing rapid growth and evolution driven by various factors.

Customer preferences: Customers in Southeast Asia are increasingly demanding digital banking services due to the region's high smartphone penetration rates and young population. They prefer convenient and secure online banking options, leading banks to invest heavily in digital infrastructure to meet these demands.

Trends in the market: In Indonesia, there is a trend towards Islamic banking services, catering to the large Muslim population in the country. Banks are expanding their Sharia-compliant offerings to tap into this market segment and differentiate themselves from competitors. In Singapore, the rise of virtual banks and fintech companies is disrupting the traditional banking sector. Customers are drawn to the innovative products and services offered by these digital players, forcing traditional banks to adapt and enhance their digital capabilities to stay competitive.

Local special circumstances: In the Philippines, the government's financial inclusion initiatives are driving growth in the banking sector. Banks are expanding their reach to unbanked populations in rural areas, offering basic banking services and promoting financial literacy to improve access to banking services. In Malaysia, the Banking market is influenced by the country's multicultural population, leading to a diverse range of banking products that cater to different ethnic groups. Banks tailor their services to meet the specific needs and preferences of Malay, Chinese, and Indian customers.

Underlying macroeconomic factors: The economic growth in Southeast Asia is fueling the expansion of the Banking market as rising incomes and increasing urbanization drive demand for banking services. As the middle class grows, so does the demand for savings, investment, and lending products, creating opportunities for banks to grow their customer base and revenue streams. Additionally, regulatory reforms and government initiatives to promote financial stability and inclusion are shaping the Banking market landscape in Southeast Asia.

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.