Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - United States

United States

In the United States, the Traditional Commercial Banking market market is anticipated to witness a considerable growth in its Net Interest Income, with projections indicating a reach of US$0.45tn by the year 2024.
Furthermore, it is expected that the Net Interest Income will display a steady annual growth rate (CAGR 2024-2028) of -5.43%, leading to a substantial increase in the market volume, estimated to be US$0.36tn by 2028.
When compared globally, it is noteworthy that in China is projected to generate the highest Net Interest Income, with an impressive amount of US$1,749.0bn in the year 2024.
The United States' traditional commercial banking market is experiencing a shift towards digitalization, with banks investing in online and mobile banking platforms to meet the changing needs and preferences of customers.

Key regions: Brazil, China, South Korea, Japan, India

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

Structure:

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 Commercial Banking market in United States has been witnessing notable trends and developments in recent years.

Customer preferences: Customers in the United States are increasingly looking for convenience, efficiency, and personalized services when it comes to their banking needs. This has led traditional commercial banks to invest heavily in digital banking solutions, such as mobile apps and online banking platforms, to meet the evolving preferences of their customers.

Trends in the market: One prominent trend in the Traditional Commercial Banking market in the United States is the rise of challenger banks and fintech companies. These new entrants are disrupting the market by offering innovative financial products and services that appeal to tech-savvy consumers. As a response, traditional commercial banks are partnering with or acquiring fintech firms to stay competitive and enhance their digital capabilities. Another trend shaping the market is the increasing focus on sustainability and corporate social responsibility. Customers are becoming more socially conscious and are looking to bank with institutions that align with their values. In response, traditional commercial banks in the United States are incorporating ESG (Environmental, Social, and Governance) criteria into their business practices and investment decisions.

Local special circumstances: The regulatory environment in the United States plays a significant role in shaping the Traditional Commercial Banking market. With stringent regulations in place to ensure financial stability and consumer protection, banks must navigate complex compliance requirements. This regulatory landscape influences the strategies and operations of traditional commercial banks in the country.

Underlying macroeconomic factors: The overall economic conditions in the United States, such as interest rates, inflation, and GDP growth, have a direct impact on the Traditional Commercial Banking market. For instance, low-interest rates can compress net interest margins for banks, while a strong economy can lead to increased lending activity. Traditional commercial banks must closely monitor these macroeconomic factors to make informed business decisions and mitigate risks in a dynamic market environment.

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.