Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Eastern Europe

Eastern Europe

In Eastern Europe, the Traditional Retail Banking market market is expected to witness a significant surge in Net Interest Income.
According to projections, the Net Interest Income is anticipated to reach US$48.91bn in 2024.
Moreover, this segment is projected to display a Compound Annual Growth Rate (CAGR 2024-2028) of 4.61%, leading to a market volume of US$58.58bn by 2028.
When compared globally, it is worth noting that in China is expected to generate the highest Net Interest Income, estimated at US$2,941.0bn in 2024.
in Eastern Europe, however, holds great potential for growth in this sector.
In Eastern Europe, traditional retail banking in Romania is experiencing a shift towards digital banking solutions.

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 Eastern Europe is experiencing significant growth and evolution driven by various factors.

Customer preferences: Customers in Eastern Europe are increasingly seeking convenient and efficient banking services. They prefer digital banking solutions that offer ease of access to their accounts, online transactions, and mobile banking applications. The shift towards digital channels is reshaping customer expectations and driving traditional banks to innovate and enhance their technological capabilities to remain competitive in the market.

Trends in the market: In countries like Poland and Romania, traditional retail banks are expanding their product offerings to include a wider range of financial services such as insurance, investment products, and wealth management. This trend is aimed at increasing customer retention and attracting new clients by providing comprehensive financial solutions under one roof. Additionally, there is a growing emphasis on personalized customer experiences and targeted marketing strategies to cater to the diverse needs of the market.

Local special circumstances: Eastern Europe presents unique challenges and opportunities for traditional retail banks. The region has a diverse regulatory environment with varying compliance requirements across different countries. This necessitates banks to adapt their operations and offerings according to local regulations while maintaining consistency in service quality. Moreover, the presence of both domestic banks and international players in the market creates a competitive landscape that drives innovation and service differentiation.

Underlying macroeconomic factors: The macroeconomic landscape in Eastern Europe plays a crucial role in shaping the traditional retail banking market. Factors such as GDP growth, inflation rates, and unemployment levels impact consumer spending habits, saving patterns, and overall demand for banking services. Economic stability and growth in countries like Czech Republic and Hungary are fueling the expansion of the banking sector, while geopolitical uncertainties in regions like Ukraine and Belarus pose challenges for market development. Adapting to these macroeconomic conditions is essential for traditional retail banks to sustain growth and profitability in Eastern Europe.

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.