Global Commercial Banking Market Report
Commercial banks are divisions of banks that provide banking services to businesses ranging from small companies to large corporations. They offer many of the same services offered in retail banking, such as current (checking) accounts and other deposit or special interest accounts, with the facility to transfer money between accounts. They also provide services for the payment of regular bills through standing orders or direct debits and offer loans based on various types and levels of security.
These institutions also provide insurance services and foreign exchange services to their business clients.
Commercial banks can be segmented according to ownership into state-owned and privately- owned banks and by geographic presence.
Banks where the major stake is held by the government include the National Bank of Australia, the State Bank of India and all of the major Chinese banks. Privately owned banks are the major competitors in the US and European commercial banking market; Wells Fargo, Bank of America and Barclays are some of the big players operating in this segment.
Most banks are focused mainly on their domestic market, but some have global operations; these include Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, ING Group and Standard & Chartered Bank. This is particularly important to larger companies with an international presence which need global commercial banking support.
Regional Market Shares
The key geographies for commercial banking include China, Europe & the USA.
China has some of the largest banks in the world. The Industrial and Commercial Bank of China, the China Construction Bank, the Agricultural Bank of China and the Bank of China together have most of the Chinese market. The Chinese government exerts strong influence in the banking sector, which continues to develop commercially and globally.
Europe is another major region for the business banking industry, where Germany, the UK, France and Italy are some of the largest markets. 80% of European businesses meet their capital requirements through bank financed debt, unlike in the USA where 85% of business capital is funded through equity. The largest commercial banking groups operating in Europe include Barclays, ING Group, HSBC and Deutsche Bank. Development in this region is now moving to expand the Eastern Europe banking sector, particularly in countries like Poland, where a thriving economy and rising credit demand create a favorable destination for banking sector investment.
The US banking industry is concentrated: the top five players. JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and US Bancorp together hold around $7 trillion in assets of the total $15 trillion held by US banks.
Banks are investing in data analytics in order to reap the value of the data they possess about customers’ banking, purchasing and investing habits. Anti-money laundering analytics, for example, are helping banks to stay ahead of fraudsters. Marketing analytics can help banks segment, target, acquire and retain commercial customers.