Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - United Kingdom

United Kingdom

In the United Kingdom, the Traditional Retail Banking market market is expected to witness a significant growth in Net Interest Income.
According to projections, the Net Interest Income is set to reach US$120.70bn by 2024.
Moreover, it is anticipated that the market will continue to expand at a compound annual growth rate (CAGR 2024-2028) of -1.09%, resulting in a market volume of US$115.50bn by 2028.
When compared globally, in China is poised to generate the highest amount of Net Interest Income in 2024, reaching a staggering US$2,941.0bn.
The United Kingdom's traditional retail banking sector is experiencing a shift towards digital services and online banking platforms.

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 United Kingdom is experiencing significant changes driven by shifting customer preferences, technological advancements, and unique local circumstances.

Customer preferences: Customers in the United Kingdom are increasingly seeking convenience, personalized services, and digital banking solutions. With the rise of online and mobile banking, customers expect seamless integration between physical branches and digital platforms. Moreover, there is a growing demand for sustainable and ethical banking practices among consumers, influencing their choice of traditional retail banks.

Trends in the market: In the United Kingdom, traditional retail banks are adapting to the digital age by investing in technology to enhance customer experience and streamline operations. Many banks are focusing on developing user-friendly mobile apps, implementing AI-powered chatbots for customer support, and exploring blockchain technology for secure transactions. Additionally, there is a trend towards collaboration between traditional banks and fintech companies to offer innovative financial products and services.

Local special circumstances: The regulatory environment in the United Kingdom, including the oversight by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), plays a crucial role in shaping the traditional retail banking market. Brexit has also introduced uncertainties regarding the future relationship between the UK and the European Union, impacting the operations and strategies of traditional banks in the region.

Underlying macroeconomic factors: Economic conditions, such as interest rates, inflation, and unemployment rates, significantly influence the performance of traditional retail banks in the United Kingdom. The Bank of England's monetary policy decisions, market competition, and global economic trends all contribute to the overall stability and growth of the banking sector. Moreover, demographic changes, such as an aging population and increasing diversity, pose both challenges and opportunities for traditional retail banks to cater to evolving customer needs and preferences.

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.