Traditional Banks - Europe

Europe

In 2024, the projected Net Interest Income in the Traditional Banks market market of Europe is estimated to reach US$0.94tn.
Traditional Commercial Banking is expected to dominate the market with a projected market volume of US$0.51tn in the same year.
The Net Interest Income is anticipated to display an annual growth rate of 1.05% (CAGR 2024-2028), resulting in a market volume of US$0.98tn by 2028.
When compared globally, in China is projected to generate the highest Net Interest Income of US$4,690.0bn in 2024.
In Germany, traditional banks are facing increased competition from digital banks, leading to a shift in customer preferences.

Key regions: Singapore, United Kingdom, Germany, Brazil, United States

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 changing landscape of the financial industry in Europe, the Traditional Banks market is witnessing notable trends and developments.

Customer preferences: Customers in Europe are increasingly seeking personalized and convenient banking services, prompting traditional banks to enhance their digital offerings and customer experiences. The demand for seamless online banking solutions and mobile banking apps is on the rise, driving traditional banks to invest in technology to meet these evolving preferences.

Trends in the market: In countries like Germany and France, traditional banks are facing growing competition from digital banks and fintech companies. As a result, many traditional banks are focusing on digital transformation initiatives to streamline their operations, reduce costs, and improve efficiency. Additionally, there is a trend towards sustainable banking practices, with traditional banks in Europe incorporating environmental, social, and governance (ESG) criteria into their decision-making processes.

Local special circumstances: In the United Kingdom, Brexit has had a significant impact on the traditional banking sector, leading to uncertainty and changing regulations. Traditional banks in the UK are navigating this challenging landscape by adjusting their strategies to mitigate risks and capitalize on new opportunities that may arise post-Brexit. In Eastern European countries, traditional banks are expanding their presence and services to cater to the growing demand for banking products in these emerging markets.

Underlying macroeconomic factors: The low-interest-rate environment in Europe is putting pressure on traditional banks' profitability, leading them to explore alternative revenue streams and cost-cutting measures. Economic uncertainties, such as the impact of the COVID-19 pandemic, are also influencing the traditional banking sector in Europe, prompting banks to reassess their risk management practices and capital adequacy levels to ensure financial stability in the face of external shocks.

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.