Retail Banking Market in US to grow at a CAGR of 4.35% during 2024-2028
The Retail Banking Market in US is expected to grow at a CAGR of 4.35% during 2023 and 2028. During this period, the market is also expected to show a growth of USD 91.47 billion. In the dynamic retail banking landscape of the US, cloud-based solutions offer significant advantages. These solutions provide retail banks with the agility to scale operations efficiently, adapting to evolving customer demands by adjusting resources, introducing new services, and optimizing operations. Cloud infrastructure eliminates the need for costly on-premises hardware and IT personnel, leading to substantial cost savings and optimized resource allocation. Robust security features and expertise in handling sensitive financial data from cloud providers ensure regulatory compliance and data protection. By eliminating the need for extensive physical infrastructure, retail banks can redirect investments towards innovation and customer-centric initiatives, all while maintaining cost-effectiveness.
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Technavio analysts predict that the Private sector banks subsegment will lead the Type segment during 2024 and 2028 The US retail banking market's private sector segment has experienced significant growth, driven by various factors. Notable private banks in this sector include JPMorgan Chase Private Bank, Bank of America Private Bank, Wells Fargo Private Bank, and Citibank Private Bank. These institutions have distinct private banking divisions catering to high-net-worth individuals, offering extensive financial services beyond conventional retail banking. Regulatory changes, technological advancements, and evolving consumer preferences are key factors fueling the expansion of this segment. The regulatory environment has become more favorable to new entrants, contributing to the increasing number of private banks in the market.
Here are the various ways based on which the market is segmented:
There are several factors that are causing the market to flourish ongoing digital transformation in retail banking
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The Retail Banking Market in the US is undergoing a significant transformation, with a growing focus on serving underbanked consumers through digital banks and fintechs. These institutions are revolutionizing the industry by offering core banking products like checking and savings accounts, loans, and credit cards in a digital-first format. Digital banks and online banks are leveraging strategic partnerships to expand their reach and provide pre-approvals for loans, funding, and investment opportunities across the credit spectrum. Underbanked consumers, who may not have access to traditional banking services, are increasingly turning to these tech-savvy competitors. Digital banking solutions offer convenience and flexibility, allowing customers to manage their finances from anywhere, at any time. However, as the competition heats up, digital banks must continue to innovate and meet evolving customer expectations. Cash remains a critical component of retail banking, and digital banks must find ways to integrate cash transactions into their offerings. Bankruptcy and disposable income are also significant factors in the retail banking market, with consumers looking for ways to manage their credit card balances and debt. As the industry continues to evolve, digital banks and fintechs will need to stay ahead of the curve to attract and retain customers in the consumer lending niche.
According to Technavio, the retail banking market in the US is a segment of the global specialized consumer services market. This market encompasses the revenue generated by providers of various consumer services, which include residential services, home security services, legal services, personal services, renovation and interior design services, consumer auction services, wedding services, and funeral services. The global specialized consumer services market size is determined by Technavio based on the revenue generated by specialized service providers, excluding those in the casino and gaming, hotel, resorts, and cruise lines; leisure facilities; restaurants; and education services sectors.
The Retail Banking Market in US is experiencing significant growth, fueled by the ongoing digital transformation in retail banking. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.
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