Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - India

India

In 2024, it is projected that the Traditional Retail Banking market market in India will reach a Net Interest Income of US$203.20bn.
Looking ahead, there is an expected annual growth rate of -2.04% (CAGR 2024-2028), which will result in a market volume of US$187.10bn by 2028.
When comparing globally, it is worth noting that in China will generate the highest Net Interest Income in 2024, with a value of US$2,941.0bn.
India's traditional retail banking market is witnessing a surge in digitalization, with customers increasingly opting for 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 India is experiencing significant developments and trends in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in India are increasingly seeking convenient and personalized banking services. With the rise of digitalization and technology, there is a growing demand for online and mobile banking solutions that offer ease of access and efficient transactions. Additionally, customers are looking for integrated financial services that cater to their diverse needs, such as savings, investments, and insurance.

Trends in the market: One prominent trend in the Traditional Retail Banking market in India is the expansion of branch networks in both urban and rural areas. Banks are focusing on increasing their physical presence to cater to a wider customer base and provide personalized services. Moreover, there is a growing emphasis on customer relationship management to enhance customer loyalty and satisfaction. Banks are leveraging data analytics and AI tools to understand customer behavior and offer targeted products and services.

Local special circumstances: In India, the regulatory environment plays a crucial role in shaping the Traditional Retail Banking market. The Reserve Bank of India (RBI) sets guidelines and regulations to ensure the stability and transparency of the banking sector. Banks need to comply with regulatory requirements related to capital adequacy, risk management, and customer protection. Additionally, the diverse cultural and linguistic landscape of India influences banking preferences and practices across different regions.

Underlying macroeconomic factors: The macroeconomic factors driving the development of the Traditional Retail Banking market in India include economic growth, demographic trends, and technological advancements. As the Indian economy continues to expand, there is a growing middle-class population with increasing disposable income, driving demand for banking services. Furthermore, the young demographic profile of India presents opportunities for banks to offer innovative digital solutions tailored to tech-savvy customers. Overall, the evolving macroeconomic landscape is reshaping the Traditional Retail Banking market in India.

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.