The global retail banking market is anticipated to grow at a CAGR of 6.5% over the forecast period owing to the enhanced monitoring capabilities and the provision of quick access to credit provided by the retail banks. Banks are increasingly focusing on enhancing the customer experience by providing better interest rates and increased customer connectivity.
Retail banking companies are working on modifying their business process so that the operational costs are reduced. This would further increase the expectations of the customers regarding different products and services. Retail banks require minimum marketing efforts in a demand-driven economy as retail deposits are stable in nature.
The global retail banking market has been segmented by type, service, by solution, and by region. On the basis of type, the retail banking market has been segmented into Public Sector Banks (PSBs), Private Sector Banks, and Foreign Banks. PSBs have a larger market share as they have established their goodwill in the market. These banks are anticipated to gain a larger market share over the coming years as they have stronger balance sheets, are more competitive, and have stronger governance.
On the basis of service, the global retail banking market has been further segmented into Savings and Checking Accounts, Personal Loans, Mortgages, Debit and Credit Cards, and Certificates of Deposit. Retail banks aim at becoming a one-stop-shop for financial services, offering as many services as possible.
On the basis of solution, the retail banking market has been segmented into hardware and software solutions. Automatic Teller Machines (ATMs) comprise hardware solutions for retail banking. They are widely used and have a strong customer base. Card processing, payment processing, electronic commerce solutions, and cheque processing are some of the standard software solutions offered by retail banks.
On the basis of region, the market has been segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The North American region is expected to dominate the market as banks are highly focused on innovation in new products, delivery channels, and analytics to improve the efficiency of banks by developing a customer-centric business model and proactively managing risk, regulations, and capital.
The key players in the global retail banking market include Industrial and Commercial Bank of China, Barclays, HSBC Group, Bank of America Leasing & Capital, LLC, Deutsche Bank, Mitsubishi UFJ Financial Group, Citigroup, Inc., BNP Paribas Leasing Solution, JPMorgan Chase & Co., and China Construction Bank.
The major strategies adopted by the key players to expand their market reach comprise new product launches, partnerships, collaborations, R&D activities, mergers and acquisitions, agreements, and expansion. For instance, in February 2018, BNP Paribas Leasing Solutions announced the signing of a Memorandum of Understanding for the complete acquisition of Landkreditt Finans AS. Ongoing process developments and financial flexibility for investing in optimal strategies would propel the market growth.
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Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.