Report Overview
Increasing adoption of digital banking, growing demand for Islamic banking products, government initiatives to promote financial inclusion, rising income levels, and changing consumer behavior are propelling the growth of GCC Retail Banking Market during the forecast period between 2023 and 2029.
GCC Retail Banking Market - Industry Trends & Forecast Report, 2029
GCC retail banking market size is projected to grow at a CAGR of 8.22% during the forecast period between 2023 and 2029. The growth of GCC retail banking market is driven by an increasing focus on financial inclusion, with governments and regulators promoting initiatives to bring more people into the formal banking system. The growth of e-commerce and digital payments is driving demand for digital banking services. The region has a high level of wealth, which is leading to demand for premium banking services. The increasing competition among banks is leading to innovative product offerings, better customer service, and more attractive interest rates, which is further driving growth in the GCC retail banking market.
GCC Retail Banking Market - Overview
Retail banking refers to the provision of banking services to individuals and small businesses. These services include deposits, loans, and basic financial management products such as credit cards and savings accounts. Retail banks typically operate through a network of physical branches, online banking platforms, and mobile apps. They serve as a bridge between individual customers and the financial system, allowing people to securely store and access their money, make transactions, and access credit. Retail banking is distinct from investment banking, which serves larger corporate clients and focuses on complex financial products and services, such as underwriting, mergers and acquisitions, and securities trading.
Growth Drivers
Digitalization and Economic Growth to Propel GCC Retail Banking Market
The retail banking sector in the Gulf Cooperation Council (GCC) region is expected to witness significant growth during the forecast period due to several key factors. One of the primary drivers is the increasing digitization of banking services, which is enabling customers to access financial products and services more easily and conveniently. Also, the rising adoption of Islamic banking products, such as Sharia-compliant mortgages and personal loans, is expected to drive the growth of the retail banking market in the GCC region. Overall, the combination of digitalization, economic growth, and the popularity of Islamic banking is expected to support the growth of the GCC retail banking market during the forecast period.
Restraints
Limited Digital Adoption and Intense Competition
The retail banking market in the GCC (Gulf Cooperation Council) countries, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, faces significant challenges due to limited digital adoption and competition. Despite a growing population and a relatively high GDP per capita, the GCC retail banking market is dominated by a few large players, resulting in limited options and high costs for consumers. Also, many GCC banks have been slow to adopt digital technologies, such as mobile banking and online services, which has led to a gap in customer experience compared to global standards. These factors pose a significant restraint on the growth and potential of the GCC retail banking market.
Impact of COVID-19 on the GCC Retail Banking Market
The COVID-19 pandemic adversely affected the GCC retail banking market. With widespread job losses and reduced economic activity, many consumers have faced financial difficulties, leading to increased demand for loan restructuring and other forms of debt relief. At the same time, the pandemic accelerated the shift towards digital banking, as consumers sought to avoid physical branch visits. Thus, many banks ramped up their digital capabilities and invested in online and mobile banking platforms. Overall, the pandemic highlighted the importance of agility and resilience in the retail banking sector, as banks had to quickly adapt to changing customer needs and market conditions.
GCC Retail Banking Market
Segmental Coverage
GCC Retail Banking Market - By Solution Type
On the basis of solution type, GCC retail banking market is split into Hardware and Software segments. Automatic Teller Machines (ATMs) are retail banking hardware solutions. They are popular and have a large customer base. Retail banks provide typical software solutions, such as card processing, payment processing, electronic commerce solutions, and cheque processing.
GCC Retail Banking Market - By Type
On the basis of type, GCC retail banking market is divided into Community Development Bank, Private Banks, Public Banks, and NBFC segments. The public banks segment is the highest contributor to the GCC retail banking market. These banks are expected to obtain the highest market share during the forecast period because their balance sheets are stronger, they are more competitive, and they have better governance.
GCC Retail Banking Market - By Service Type
By service type, GCC retail banking market is divided into Transactional Accounts, Savings Account, Debit Cards, ATM Cards, Credit Cards, Mortgages, and Loans segments. The transactional account segment is the largest contributor to the GCC retail banking market. Transactional accounts are basic bank accounts that allow customers to deposit and withdraw money, pay bills, and transfer funds. They are the most common type of bank account and are typically used for day-to-day banking activities. Also, the ATM cards segment is expected to grow during the forecast period. ATM cards allow customers to withdraw cash from ATMs without having to visit a bank branch. ATM cards can also be used to check account balances and make deposits.
GCC Retail Banking Market - By Country
The in-depth research report on the GCC retail banking market covers the region's major countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE). Bahrain dominates the GCC retail banking market. The retail banking market in Bahrain is well-developed, with a high degree of competition among banks. The market is dominated by local banks, such as Ahli United Bank, Bahrain Islamic Bank, and National Bank of Bahrain, along with few international players.
Competitive Landscape
Major players in the GCC retail banking market include National Commercial Bank (NCB), Emirates NBD Bank, Qatar National Bank (QNB), Abu Dhabi Commercial Bank (ADCB), Al Rajhi Bank, Gulf International Bank (GIB), Dubai Islamic Bank (DIB), Commercial Bank of Dubai (CBD), Arab National Bank (ANB), Ahli United Bank (AUB), Riyad Bank, Bank AlJazira, Saudi British Bank (SABB), Kuwait Finance House (KFH), and Oman Arab Bank (OAB). The key strategies used by these market leaders are new product launches, mergers & acquisitions, and alliances. To grow their market share, these companies are also focusing on investing in innovations, collaborations, and expansions.
Recent Developments
In February 2021 - Abu Dhabi Islamic Bank (ADIB) launched a new digital banking platform called 'ADIB Direct' that enables customers to open an account in minutes and manage their finances digitally.
In November 2020 - Dubai Islamic Bank (DIB) launched its first-ever digital-only bank, called 'Liv.', which offers a range of banking services through a mobile app.
By Solution Type
Hardware
Software
By Type
Community Development Bank
Private Banks
Public Banks
NBFC
By Service Type
Transactional Accounts
Savings Account
Debit Cards
ATM Cards
Credit Cards
Mortgage
Loans
Others
By Country
Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
United Arab Emirates