Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - China

China

In China, the Traditional Retail Banking market market is expected to witness a substantial increase in Net Interest Income, reaching US$2.94tn in 2024.
Looking ahead, it is projected to exhibit a compound annual growth rate (CAGR 2024-2028) of 5.99%.
This growth rate will contribute to the market volume of US$3.71tn by 2028.
In comparison to other countries, in China is anticipated to generate the highest Net Interest Income, with US$2,941.0bn in 2024.
China's traditional retail banking market is experiencing a rapid shift towards digitalization and online banking services.

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 China is experiencing significant growth and transformation in response to changing customer preferences, technological advancements, and local special circumstances.

Customer preferences: Chinese customers are increasingly seeking convenience, personalized services, and digital banking solutions. With the rise of the tech-savvy younger generation, there is a growing demand for seamless online and mobile banking experiences. Customers also value traditional face-to-face interactions and personalized financial advice, leading to a hybrid approach in the retail banking sector.

Trends in the market: One prominent trend in the Traditional Retail Banking market in China is the rapid adoption of digital banking services. Traditional banks are investing heavily in digital transformation to enhance customer experience, streamline operations, and remain competitive in the market. This shift towards digitalization is driven by the increasing penetration of smartphones, internet connectivity, and the changing lifestyle of Chinese consumers.

Local special circumstances: China's unique regulatory environment and market dynamics play a crucial role in shaping the Traditional Retail Banking sector. The government's initiatives to promote financial inclusion, regulate the sector, and support innovation are influencing the strategies of domestic and foreign banks operating in the country. Additionally, the intense competition among banks, fintech companies, and digital payment providers is driving innovation and collaboration in the market.

Underlying macroeconomic factors: The growing middle class, urbanization, and rising disposable incomes in China are fueling the demand for retail banking products and services. As more Chinese consumers enter the formal banking system, there is a need for tailored financial solutions, wealth management services, and access to credit. Moreover, the country's stable economic growth, favorable demographic trends, and supportive regulatory framework are creating opportunities for traditional banks to expand their market presence and cater to the evolving 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.