Traditional Banks - Japan

  • Japan
  • In Japan, the net interest income within the Traditional Banks market market is forecasted to reach US$78.56bn in 2024.
  • The market is primarily dominated by Traditional Commercial Banking, which is projected to have a market volume of US$69.76bn in the same year.
  • Looking ahead, the net interest income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 2.41%, resulting in a market volume of US$88.48bn by 2029.
  • When compared globally, the highest net interest income is anticipated to be generated China, amounting to US$3,869.0bn in 2024.
  • Despite the rise of digital banking, traditional banks in Japan continue to thrive due to a strong cultural preference for in-person and relationship-based banking services.

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

 
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Analyst Opinion

The Traditional Banks market in Japan has been experiencing interesting developments in recent years.

Customer preferences:
Customers in Japan still value the reliability and stability offered by traditional banks, preferring the established reputation and long history of these institutions. The older generation, in particular, tends to trust traditional banks more than newer digital banking options.

Trends in the market:
One noticeable trend in the Traditional Banks market in Japan is the increasing focus on digitalization and innovation. Traditional banks are investing heavily in technology to improve customer experience and streamline operations. Additionally, there is a growing trend of partnerships between traditional banks and fintech companies to offer more diverse and convenient services to customers.

Local special circumstances:
In Japan, the aging population and low birth rate have significant implications for the Traditional Banks market. As the population ages, there is a greater need for banking services tailored to older customers, such as wealth management and retirement planning. Traditional banks are adapting their services to cater to this demographic shift.

Underlying macroeconomic factors:
The low interest rate environment in Japan has put pressure on traditional banks' profitability. In response, banks are exploring new revenue streams and cost-cutting measures to maintain their competitiveness. Additionally, the overall economic conditions in Japan, such as slow GDP growth and deflationary pressures, impact the demand for banking services and influence the strategic decisions of traditional banks.

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.

Overview

  • Net Interest Income
  • Analyst Opinion
  • Deposits
  • Loans
  • Credit Card Interest Income
  • ATMs & Bank Branches
  • Methodology
  • Key Market Indicators
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