Banking - United States

United States

In the United States, the projected Net Interest Income in the Banking market for 2024 is expected to reach US$0.87tn.
Traditional Banks are set to dominate this market segment with a projected market volume of US$0.48tn in the same year.
Looking ahead, the Net Interest Income is anticipated to grow at an annual rate of -6.32% (CAGR 2024-2028), resulting in a market volume of US$0.67tn by 2028.
In comparison to other countries, it is worth noting that in China is expected to generate the highest Net Interest Income, reaching US$5,659.0bn in 2024.
The United States, being the largest economy in the world, is witnessing a rise in digital banking services, with customers shifting towards online and mobile platforms for their banking needs.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises 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.

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 & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in United States has been experiencing significant developments and trends in recent years.

Customer preferences: Customers in the United States are increasingly seeking convenience, speed, and personalized services in their banking experience. This has led to a growing demand for digital banking solutions, such as mobile banking apps and online account management. Customers value seamless integration between their banking activities and daily lives, driving banks to invest in technology to meet these evolving preferences.

Trends in the market: One notable trend in the US banking market is the rise of challenger banks and fintech companies. These innovative players are disrupting the traditional banking sector by offering agile, user-friendly, and often more cost-effective financial services. As a result, traditional banks are under pressure to enhance their digital capabilities and streamline their operations to remain competitive in the evolving landscape. Another trend shaping the US banking market is the increasing focus on sustainability and ethical banking practices. Customers are becoming more conscious of the environmental and social impact of their financial decisions, leading banks to integrate sustainability initiatives into their operations. This includes offering green financial products, investing in renewable energy projects, and promoting corporate social responsibility.

Local special circumstances: The regulatory environment in the United States plays a significant role in shaping the banking market. With stringent regulations and compliance requirements, banks must navigate a complex framework to ensure transparency, security, and consumer protection. This regulatory landscape influences the strategies and operations of banks, impacting their product offerings, risk management practices, and overall competitiveness in the market.

Underlying macroeconomic factors: The macroeconomic environment in the United States, including factors such as interest rates, inflation, and economic growth, has a direct impact on the banking sector. Fluctuations in interest rates, for example, can influence borrowing costs, investment decisions, and overall profitability for banks. Economic indicators such as consumer spending, unemployment rates, and GDP growth also shape the demand for banking services and the overall financial health of the industry. Adapting to these macroeconomic conditions is essential for banks to sustain growth and navigate challenges in the dynamic market landscape.

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.