Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - South Korea

South Korea

In South Korea, the Traditional Retail Banking market market is anticipated to witness a significant increase in Net Interest Income, reaching US$63.67bn by 2024.
This projection suggests a promising future for the country's banking sector.
Furthermore, there is an expected annual growth rate of 5.22% between 2024 and 2028, which leads to a market volume of US$78.04bn by the end of 2028.
This steady growth highlights the resilience and potential of South Korea's retail banking industry.
In terms of global comparison, it is worth noting that in China will continue to dominate the Net Interest Income market.
The United States is projected to generate a substantial amount of US$2,941.0bn in 2024.
This figure highlights the significant difference in market size between in South Korea and in China.
However, South Korea's banking sector shows promising growth potential and should not be overlooked in the global market landscape.
South Korea's traditional retail banking market is experiencing a shift towards digital banking services, driven by the tech-savvy population and increasing demand for convenience.

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

Amidst the evolving landscape of South Korea's Traditional Retail Banking market, several key trends and developments have emerged, shaping the industry in unique ways.

Customer preferences: Customers in South Korea are increasingly leaning towards digital banking solutions, opting for convenience and efficiency in their banking transactions. Mobile banking apps and online platforms have gained significant popularity among tech-savvy consumers, driving the demand for more seamless and user-friendly digital banking experiences. Additionally, there is a growing preference for personalized services and tailored financial products that cater to individual needs and preferences.

Trends in the market: One prominent trend in the South Korean Traditional Retail Banking market is the expansion of digital banking services and the integration of innovative technologies such as artificial intelligence and machine learning. Banks are investing in digital transformation initiatives to enhance customer engagement, streamline processes, and improve overall operational efficiency. Moreover, there is a noticeable shift towards omnichannel banking experiences, where customers can seamlessly switch between online, mobile, and physical banking channels.

Local special circumstances: South Korea's highly competitive banking landscape, dominated by a few major players, has led to intense rivalry among traditional banks vying for market share. In response to this competition, banks are focusing on enhancing their service offerings, investing in digital capabilities, and exploring strategic partnerships to stay ahead in the market. Additionally, regulatory changes and government initiatives aimed at promoting financial inclusion and consumer protection are influencing the way traditional banks operate and interact with customers in South Korea.

Underlying macroeconomic factors: The macroeconomic environment in South Korea, characterized by factors such as economic growth, technological advancement, and changing consumer behavior, is playing a significant role in shaping the Traditional Retail Banking market. As the country continues to embrace digitalization and innovation across industries, traditional banks are under pressure to adapt to the changing landscape and meet the evolving needs of customers. Moreover, demographic shifts, such as an aging population and increasing urbanization, are influencing banking trends and driving the demand for more diverse and flexible financial services 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.