Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Russia

Russia

In Russia, the Traditional Retail Banking market market is expected to witness a significant growth in Net Interest Income, reaching a projected value of US$19.52bn in 2024.
Looking ahead, the market is anticipated to display a compound annual growth rate (CAGR 2024-2028) of -3.28%, which would result in a market volume of US$17.08bn by 2028.
It is worth noting that in a global context, in China is forecasted to generate the highest Net Interest Income, amounting to US$2,941.0bn in 2024.
In the Russian traditional retail banking market, there is a growing trend towards digitization 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 Russia is experiencing a shift in customer preferences and market trends, driven by local special circumstances and underlying macroeconomic factors.

Customer preferences: Russian consumers are increasingly seeking convenience and efficiency in their banking experience, prompting a growing demand for digital banking services. This shift is fueled by the widespread adoption of smartphones and the internet, leading customers to favor online and mobile banking solutions for their day-to-day financial transactions. Moreover, there is a rising interest in personalized services and tailored financial products among Russian retail banking customers, reflecting a desire for more customized banking experiences.

Trends in the market: One notable trend in the Traditional Retail Banking market in Russia is the emergence of neobanks and fintech companies offering innovative solutions to cater to the evolving needs of customers. These digital disruptors are challenging traditional banks by providing seamless digital experiences, competitive interest rates, and advanced financial management tools. As a result, established banks in Russia are increasingly investing in digital transformation initiatives to enhance their digital offerings and remain competitive in the market.

Local special circumstances: The Russian retail banking sector is influenced by unique local circumstances, such as regulatory developments and geopolitical factors. Regulatory changes aimed at promoting competition and consumer protection have encouraged innovation and product diversification in the market. Additionally, geopolitical tensions and economic uncertainties have shaped consumer behavior and investment decisions, impacting the overall landscape of the retail banking industry in Russia.

Underlying macroeconomic factors: Macroeconomic factors play a significant role in shaping the Traditional Retail Banking market in Russia. Economic conditions, interest rates, inflation, and currency fluctuations can impact consumer confidence, borrowing behavior, and investment preferences. As the Russian economy continues to evolve and adapt to external pressures, such as sanctions and global market trends, retail banks in the country must navigate these macroeconomic factors to effectively manage risks and drive growth in the market.

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.