Traditional Banks - Australia

Australia

In 2024, the projected Net Interest Income in the Traditional Banks market market in Australia is estimated to reach US$75.77bn.
Traditional Commercial Banking is expected to dominate this market segment with a projected market volume of US$66.29bn in 2024.
Looking ahead, the Net Interest Income is forecasted to display an annual growth rate (CAGR 2024-2029) of -1.68%, resulting in a market volume of US$69.63bn by 2029.
When comparing globally, in China is expected to generate the highest Net Interest Income of US$3,869.0bn in 2024.
Australia's traditional banks are facing increasing competition from digital disruptors, forcing them to invest in technology and improve their digital offerings.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks 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. 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.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, 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 and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

Amidst the evolving landscape of the financial sector in Australia, the Traditional Banks market in the country is experiencing notable shifts and developments.

Customer preferences: Customers in Australia are increasingly seeking personalized and convenient banking services. They are inclined towards traditional banks that offer a wide range of products and services, including savings accounts, loans, and investment options. Additionally, customers value the trust and reliability associated with long-established traditional banks in Australia.

Trends in the market: One prominent trend in the Traditional Banks market in Australia is the growing adoption of digital banking services. Traditional banks in the country are investing heavily in digital platforms to enhance customer experience and cater to the changing preferences of tech-savvy consumers. Furthermore, there is a trend towards sustainability and ethical banking practices, with customers showing interest in banks that prioritize environmental and social responsibility.

Local special circumstances: Australia's banking sector is characterized by a high level of competition among traditional banks, leading to constant innovation and service improvements. The presence of major players in the market drives traditional banks to differentiate themselves through innovative products and customer-centric strategies. Moreover, regulatory requirements and compliance standards play a significant role in shaping the operations of traditional banks in Australia.

Underlying macroeconomic factors: The macroeconomic environment in Australia, including factors such as interest rates, inflation, and economic growth, influences the Traditional Banks market in the country. Economic stability and growth contribute to the overall performance of traditional banks, affecting aspects such as lending practices, investment decisions, and profitability. Additionally, demographic shifts and changing consumer behaviors impact the demand for banking services, prompting traditional banks to adapt their strategies to meet evolving customer needs.

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.