Banking - Switzerland

Switzerland

In Switzerland, the Banking market is expected to witness a significant growth in Net Interest Income, with projections indicating a figure of €81.45bn in 2024.
Among various players in the market, Traditional Banks are set to dominate, with a projected market volume of €52.76bn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit a steady annual growth rate of 3.96% (CAGR 2024-2029), resulting in a market volume of €98.89bn by 2029.
In a global context, it is noteworthy that China is expected to generate the highest Net Interest Income, with a projected figure of €4,017.0bn in 2024.
Switzerland's banking market continues to thrive, with its long-standing reputation for stability and privacy attracting high net worth individuals and multinational corporations.

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

Switzerland, known for its strong financial industry, has a highly developed banking market that caters to a diverse range of customers.

Customer preferences: Swiss customers in the banking sector value privacy, security, and personalized services. They prefer traditional banking institutions with a long-standing reputation for stability and reliability. Additionally, there is a growing interest in sustainable and socially responsible banking practices among customers in Switzerland.

Trends in the market: One noticeable trend in the Swiss banking market is the increasing adoption of digital banking services. Traditional banks are investing in digital transformation to meet the changing needs of customers who seek convenience and efficiency in their banking transactions. Another trend is the rise of fintech companies offering innovative solutions in areas such as payments, wealth management, and peer-to-peer lending, challenging traditional banks in the market.

Local special circumstances: Switzerland's position as a global financial hub and its reputation for financial stability attract a significant amount of foreign capital into its banking sector. The country's strict regulations and adherence to international banking standards contribute to the overall trustworthiness of Swiss banks. Moreover, the presence of private banks that specialize in wealth management services for high-net-worth individuals sets Switzerland apart in the global banking landscape.

Underlying macroeconomic factors: The stable Swiss economy, low unemployment rate, and high per capita income levels provide a solid foundation for the banking sector to thrive. The country's political neutrality and sound regulatory framework also contribute to a favorable business environment for banks. Additionally, Switzerland's strategic location in the heart of Europe and its strong network of international trade relationships support the growth of its banking 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.