Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Brazil

Brazil

In Brazil, the Traditional Retail Banking market market is expected to witness an impressive growth in Net Interest Income.
By 2024, the projected Net Interest Income is estimated to reach US$42.66bn.
Looking ahead, the market is anticipated to experience a steady annual growth rate (CAGR 2024-2028) of 2.31%.
This growth trajectory is expected to result in a market volume of US$46.74bn by 2028.
When compared to global figures, it is worth noting that in China is projected to generate the highest Net Interest Income in 2024, with a total of US$2,941.0bn.
In Brazil, traditional retail banking is facing increased competition from digital banks, leading to a shift in customer preferences.

Key regions: Singapore, Germany, India, Japan, South Korea

Definition:
Traditional retail banking refers to the financial services sector that provides a range of financial products and services to individual consumers through store-based branches and other traditional channels. These services include personal loans, savings and checking accounts, credit cards, mortgages, and other financial products designed specifically for individual consumers.
Traditional retail 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.
Despite facing increased competition and changing customer preferences, traditional retail banks continue to play a vital role in the financial landscape. They are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services.
Overall, traditional retail banking provides a wide range of financial services to individual consumers through established, trusted channels and continues to be an important part of the financial landscape.

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., Bank of America Corp., and BNP Paribas.

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Analyst Opinion

The Traditional Retail Banking market in Brazil is experiencing notable shifts and developments that are shaping the industry landscape.

Customer preferences: Customers in Brazil are increasingly seeking convenience and accessibility in their banking services. With the rise of digitalization and the growing popularity of online and mobile banking, customers are looking for seamless and user-friendly banking experiences. This has led to a surge in demand for digital banking solutions and services that offer flexibility and convenience.

Trends in the market: One prominent trend in the Brazilian Traditional Retail Banking market is the expansion of digital banking offerings by traditional banks. In response to changing customer preferences and the need to stay competitive, traditional banks in Brazil are investing heavily in digital technologies and platforms. This trend is driven by the desire to enhance customer experience, improve operational efficiency, and reach a wider customer base. Another key trend is the increasing focus on financial inclusion and reaching unbanked populations in Brazil. Traditional banks are expanding their reach to underserved communities through innovative banking solutions and partnerships with fintech companies. This trend is not only driven by regulatory requirements but also by the potential for growth and market expansion in untapped segments.

Local special circumstances: Brazil's unique regulatory environment and market dynamics play a significant role in shaping the Traditional Retail Banking sector. The regulatory framework in Brazil is evolving to promote competition, innovation, and financial inclusion in the banking industry. This has created opportunities for traditional banks to diversify their product offerings and expand their market presence. Moreover, the competitive landscape in Brazil is characterized by a mix of traditional banks, digital banks, and fintech companies. This diverse ecosystem is driving innovation and collaboration within the industry, leading to the development of new banking products and services that cater to the evolving needs of customers.

Underlying macroeconomic factors: The macroeconomic environment in Brazil, including factors such as GDP growth, inflation rates, and interest rates, has a significant impact on the Traditional Retail Banking market. Economic stability and growth can boost consumer confidence and spending, leading to increased demand for banking services. On the other hand, economic uncertainties and fluctuations can influence customer behavior and investment decisions, affecting the overall performance of the banking sector.

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.