Traditional Banks - India

India

In 2024, it is projected that the net interest income in the Traditional Banks market market in India will reach US$331.80bn.
Traditional Retail Banking is the dominant player in this market segment, with a projected market volume of US$203.20bn in the same year.
Looking ahead, the net interest income is expected to grow at an annual rate of -1.67% (CAGR 2024-2028), resulting in a market volume of US$310.20bn by 2028.
In a global context, in China is expected to generate the highest net interest income, reaching US$4,690.0bn in 2024.
Traditional banks in India are facing stiff 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

The Traditional Banks market in India has been experiencing significant growth and development in recent years.

Customer preferences: Customers in India traditionally prefer the personalized service and face-to-face interactions offered by traditional banks. They value the trust and reliability associated with these long-established financial institutions, especially when it comes to handling their savings and investments.

Trends in the market: One of the key trends in the Traditional Banks market in India is the increasing adoption of digital banking services. Traditional banks in India are investing heavily in technology to improve their online and mobile banking platforms, making it more convenient for customers to access their accounts and conduct transactions remotely. Another trend is the expansion of branch networks in both urban and rural areas to cater to a wider customer base.

Local special circumstances: In India, the regulatory environment plays a significant role in shaping the Traditional Banks market. The Reserve Bank of India (RBI) sets strict guidelines and regulations for banks operating in the country, which influences their operations and offerings. Additionally, the diverse demographic and cultural landscape of India also impacts the way traditional banks design their products and services to cater to the varying needs of different customer segments.

Underlying macroeconomic factors: The growth of the Traditional Banks market in India is closely tied to the overall economic performance of the country. Factors such as GDP growth, inflation rates, and interest rates have a direct impact on the banking sector. As the Indian economy continues to expand and evolve, traditional banks are presented with opportunities to innovate and grow their market share by offering a wide range of financial products and services to meet the changing needs of customers.

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.