Is the retail banking industry growing?
The retail banking market in US is forecasted to grow by USD 91.47 billion during 2023-2028, accelerating at a CAGR of 4.35% during the forecast period. The market is driven by ongoing digital transformation in retail banking, growing collaboration with fintech companies, and increasing focus on financial inclusion.
Traditional Retail Banking - Worldwide
This growth is expected to continue at a compound annual growth rate (CAGR) of 4.40% from 2024 to 2028, leading to a market volume of US$5.18tn by 2028.
The market is predominantly dominated by Traditional Banks, which are expected to have a projected market volume of US$7.03tn in the same year. Moving forward, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2029) of 4.90%.
Meeting changing customer expectations is a top challenge and opportunity for retail banks. Customers now expect personalized services and convenient banking options tailored to their needs. This change in customers' expectations means banks must offer a smooth experience across online, mobile, and in-person banking.
Digital banking may be the future, but branch baking is here to stay. Sales leaders in retail banking who want to thrive in the future need to embrace this transformation, the integration of old and new, and reimagine how they manage their customer experience and how they meet customer needs.
The National Retail Federation said Wednesday that it expects retail sales will reach between $5.23 trillion and $5.28 trillion this year. The 2024 forecast is roughly in line with the 10-year pre-pandemic average annual sales growth of 3.6%.
As of June 2020, the average net profit margin for retail or commercial banks was 13.9%, a sharp decline over previous years attributed to tightening financial market conditions and the COVID-19 pandemic.
Bank regulators view any ratio over 300% as excess exposure to CRE, which puts the bank at greater risk of failure. The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion.
- Increasing cyber-attacks targeting financial data.
- Rising competition from fintech and non-traditional financial institutions.
- Regulatory changes impacting operations and profitability.
The future of retail is more hybrid, much as remote work solutions with mixed offices have proliferated. Nowadays, it's difficult to distinguish between online and brick-and-mortar stores, so many business owners are unsure of how to effectively set up their small enterprises for success in the coming year.
What is the future of banking in 2030?
Successful banks of 2030 will master data-driven customer experience across channels, underpinned by artificial intelligence and robotic automation. Consumers are becoming far more aware of the value of their personal data and the importance of keeping it safe and secure.
At its core, ecosystem banking is a relationship model where finance houses partner with third-party service providers and fintech companies, such as open finance platforms or marketplaces, to improve their existing offerings.
Cloud-based banking in 2024 isn't just about new tech. It's a big change that makes banks quicker, more creative, and ready for growth. With the cloud, banking is entering a new phase – it's becoming faster, easier to use, and safer than ever.
State regulators closed Republic First Bank in April 2024, marking the first bank failure of the year. Fulton Bank entered into an agreement with the FDIC to purchase most of Republic First's $6 billion in assets and to assume most of its $4 billion in deposit liabilities.
The banking industry is known for its stability, ensuring that employees have a reliable source of income. Additionally, major banks often provide competitive salaries, offering financial rewards that can be attractive to professionals.
Augmented reality (AR)
AR is the next big thing for retailers. It has been popular for quite some time now in the retail space. But after the pandemic, AR technology has become more important as shoppers try to bridge the gap between online and physical shopping.
In the US, only about 11% of commerce was ecommerce last year. So brick & mortar stores are still very much alive. What we're finding where I work (in retail customer insights) is that physical retail is not dying, but boring physical retail is.
Ever since Covid hit in 2020, retailers have been struggling and pivoting to not only keep up with changing consumer preferences, but also to keep their brand relevant. This time has brought some of the worst financial strain to retailers.
The average retail banker salary in California is $52,850 per year or $25.41 per hour.
With online by far being the preferred – or at least, most often used – channel – the role of contact centers is declining while the role of mobile (now at 36%) is rapidly increasing). In the Middle East online banking is lagging behind.
What is the best degree for retail banking?
Prerequisites for a Career in Retail Banking
To get started with a career in retail banking, you need an accredited degree in finance, business, economics, accounting, banking, IT, international business, or corporate/business law, depending on the role you take in retail banking.
First Republic Bank failed on April 28, 2023. Signature Bank failed on March 12, 2023. Silicon Valley Bank failed on March 10, 2023. Almena State Bank failed on October 23, 2020.
JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.
A run on deposits (leaving the bank without the cash to pay customer withdrawals). Too many bad loans/assets that fall sharply in value (eroding the bank's capital reserves). A mismatch between what the bank can earn on its assets (primarily loans) and what it has to pay on its liabilities (primarily deposits).
Working with large sums of money and sensitive information places bank tellers in a position of high responsibility and potential risk. The stress associated with security and vigilance can linger after hours, impacting relaxation and peace of mind during personal time.
