Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Kenya

Kenya

In Kenya, the Traditional Retail Banking market market is expected to witness a significant increase in Net Interest Income.
By 2024, it is projected to reach US$1.70bn.
Looking ahead, there is an anticipated annual growth rate (CAGR 2024-2029) of 3.51%, which will contribute to a substantial market volume of US$2.02bn by 2029.
When compared globally, in China is forecasted to generate the highest Net Interest Income.
In 2024, it is estimated to be US$2,426.0bn.
Kenya's traditional retail banking market is experiencing a shift towards digital banking services to meet the growing demand for convenient and accessible financial solutions.

Key regions: France, Brazil, Germany, United Kingdom, United States

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

Kenya's Traditional Retail Banking market is experiencing significant growth and development, driven by various factors shaping the industry in the country.

Customer preferences: Customers in Kenya are increasingly demanding more personalized and convenient banking services, leading traditional retail banks to invest in digital transformation to meet these expectations. The shift towards digital channels is driven by the need for efficiency, speed, and accessibility in banking services, reflecting a global trend in the industry.

Trends in the market: One notable trend in the Kenyan Traditional Retail Banking market is the rise of mobile banking and digital payment solutions. With the widespread adoption of mobile phones and the success of mobile money platforms like M-Pesa, traditional banks are incorporating digital features into their services to stay competitive. This trend is reshaping the market landscape and driving innovation in product offerings and customer experience.

Local special circumstances: Kenya's unique market dynamics, such as a young and tech-savvy population, high mobile phone penetration rates, and a growing middle class, are contributing to the rapid evolution of the Traditional Retail Banking sector. These factors create a fertile ground for the adoption of digital banking solutions and drive competition among banks to differentiate themselves through technology and innovation.

Underlying macroeconomic factors: The macroeconomic environment in Kenya, including stable economic growth, government initiatives to promote financial inclusion, and regulatory reforms to support the banking sector, are providing a conducive backdrop for the expansion of Traditional Retail Banking services. These factors are encouraging investment in the industry and fostering a competitive landscape that benefits both banks and consumers.

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.