Retail Banking Market

Market Perspective

The global Retail Banking Market was valued at USD 1,955.12 billion in 2022 and is projected to reach USD 3334.69 billion by 2030, growing at a CAGR of 7.03% from 2023 to 2030.

The global retail banking market is a highly competitive and rapidly evolving industry. With the rise of digitalization and changing customer preferences, banks are facing new challenges and opportunities. The market is characterized by intense competition among traditional banks, alongside the emergence of new players such as fintech companies and digital banks.

This has led to a shift in focus towards enhancing customer experience, improving operational efficiency, and leveraging technology to stay ahead in the retail banking market. In addition, regulatory changes and increasing customer expectations for personalized and convenient banking services have shaped the dynamics of the retail banking sector. As a result, traditional banks are investing heavily in digital transformation initiatives to streamline their processes, offer innovative products and services, and provide a seamless omnichannel experience to their customers.

Furthermore, fintech companies and digital banks, are leveraging their technological expertise to disrupt the traditional banking model and offer more agile and customer-centric solutions. This industry competitiveness has not only pushed banks to adapt and innovate but has also resulted in a wider range of options for consumers, ultimately leading to a more dynamic and customer-driven retail banking sector.

Analyst’s Review on Retail Banking Market

The retail banking market is experiencing significant growth and transformation. The significant growth can be attributed to various factors, such as technological advancements, evolving customer choices, and heightened competition. Furthermore, the value of personalized services and the incorporation of artificial intelligence in fostering customer involvement and loyalty have also played a crucial role in this expansion of the retail banking market. Overall, retail banks acknowledge the need for adapting to stay relevant in the current digital age. By incorporating technology into their operations, banks are able to provide more convenient and efficient services to their customers.

Furthermore, the integration of artificial intelligence allows banks to offer personalized recommendations and customize their offerings for each individual customer, thereby fostering stronger relationships and long-term loyalty. As the industry continues to evolve, it is crucial for retail banks to stay ahead of the curve and embrace these changes in order to thrive in the retail banking market.

Market Definition

Retail banking refers to the provision of financial services by banks to individual consumers. It includes services such as checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit. Retail banks focus on meeting the financial needs of individuals and households.

In addition, they typically have branches in cities & towns for easy accessibility. This plays a vital role in the economy by offering essential financial services to individuals and contributing to the stability and growth of the banking sector. In addition to the basic services mentioned above, retail banks further offer additional conveniences, including online banking and mobile banking apps, to cater to the changing needs and preferences of their customers.

These technological advancements have made it easier for individuals to manage their finances and make transactions at their convenience. Moreover, retail banks often provide financial advice and guidance to help individuals make informed decisions about their money, further contributing to their financial well-being. Overall, the retail banking sector plays a crucial role in promoting financial inclusion and ensuring the smooth functioning of the economy.

Market Dynamics

Advances in technology are driving the growth of the retail banking market due to the rise of digital banking, mobile applications, and fintech startups. This has revolutionized the way customers engage with their banks. For instance, with just a few taps on their smartphones, customers can now perform a wide range of banking services, including transferring funds, paying bills, and even applying for loans. These technological advancements have not only increased convenience for customers but have also forced traditional banks to adapt and invest in their digital platforms to stay competitive in the rapidly evolving retail banking market.

Consequently, customers now have more options than ever before when it comes to choosing a banking provider. Accordingly, traditional banks are increasingly offering mobile banking apps and online platforms to meet the growing demand for digital services. This remarkable shift towards digitization has further led to the rise of neobanks, which are fully digital banks operating exclusively online. These neobanks, with their user-friendly interfaces and innovative features, are gaining immense popularity among tech-savvy customers looking for a seamless banking experience. Overall, advancements in technology have not only transformed the banking industry but also empowered customers with greater control and accessibility to financial services. However, threats associated with cybersecurity are expected to hamper the growth of the retail banking market.

Segmentation Analysis

The global retail banking market is segmented based on type, service, and geography.

Based on product type, the market is bifurcated into public sector banks, private sector banks, foreign banks, community development banks, and non-banking financial companies. The public sector banks segment dominated the market in 2022, due to their extensive network of branches and ATMs spread across the country, which makes them easily accessible to customers in both urban and rural areas. In addition, these banks offer a range of products and services tailored to the needs of retail customers, including personal loans, home loans, and savings accounts featuring attractive interest rates. Furthermore, public sector banks are renowned for their reliablity and trustworthiness, instilling confidence in customers and encouraging them to choose these banks for their banking needs.

Based on service, the market is bifurcated into saving and checking account, transactional account, personal loan, debit and credit cards, ATM cards, and others. The saving and checking account segment accounted for the largest market share in 2022, as these accounts are considered to be essential financial tools for both individuals and businesses. Saving and checking accounts provide a safe and convenient way to manage and access funds, and are thus highly sought after by customers. In addition, these accounts often come with a range of features and benefits, such as online banking, mobile apps, and ATM access, which enhance their appeal. Furthermore, the widespread availability of these accounts across various banks and financial institutions are contributsing significantly to their dominance in the retail banking market.

Geographical Analysis

Based on region, the global retail banking market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

Asia-Pacific emerged as the leading region in the market in 2022, fueled by various factors such as robust economic expansion, a diverse and sizable population, and efforts to enhance financial inclusivity. In addition, the rapid pace of urbanization, advancements in technology, and a cultural shift towards digital banking are driving growth of the regional market. Furthermore, governments in the region have implemented supportive policies and initiatives to promote product adoption,. In addition to this, changing consumer preferences, notably the rising inclination toward online and mobile banking, are shaping the retail banking landscape and driving the growth of the market.

Middle East & Africa is the fastest growing regin over the forecast period due to the expanding middle-class population and strong economic growth, which are driving the demand for retail banking services in the region. Furthermore, efforts to promote financial inclusion and the region's increasing population are expanding the customer base for financial products. Moreover, the region is witnessing substantial growth in retail banking due to the rising adoption of digital banking solutions and the presence of a young, technologically inclined population. Moreover, supportive government policies, regulatory reforms, and investments in infrastructure are fostering an environment that encourages the expansion of the regional retail banking sector.

Competitive Landscape

The global retail banking market study will provide valuable insights with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers & acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing heavily in R&D activities, building new manufacturing facilities, and supply chain optimization. The major players in the retail banking market are:

• BNP Paribas
• Citigroup, Inc.
• The Hongkong and Shanghai Banking Corporation Limited
• Industrial and Commercial Bank of China
• JPMorgan Chase & Co.
• Bank of America Corporation
• Barclays
• China Construction Bank
• Deutsche Bank
• Mitsubishi UFJ Financial Group, Inc.

Key Developments

• June 2023(Launch): Bajaj Finserv announced the launch of a mutual fund business. The non-financial banking company obtained SEBI’s approval for its MF business, which operates under the Bajaj Finserv Mutual Fund.
• May 2023(Collaboration): Wio Bank, a digital platform banking platform collaborated with the Abu Dhabi Development Company (ADQ), First Abu Dhabi Bank (FAB), Etisalat, and Alpha Dhabi Holding, with plan to launch its retail proposition by the end of H1 2023.

The global Retail Banking Market is segmented as:

By Type

• Public Sector Banks
• Private Sectors Banks
• Foreign Banks
• Community Development Banks
• Non-Banking Financial Companies

By Service

• Saving and Checking Account
• Transactional Account
• Personal Loan
• Debit and Credit Cards
• ATM Cards
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America.