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The community banking market size is forecast to increase by USD 247.1 billion at a CAGR of 5.96% between 2023 and 2028. The market is experiencing significant growth, driven by several key trends and factors. One notable trend is the increasing adoption of microlending in developing nations, which is expanding financial inclusion and providing access to credit for underserved populations. Another trend is the rising adoption of digital platforms, enabling community banks to offer convenient and efficient services to customers. However, there is a challenge of lack of awareness about community banking services in certain regions, which hinders market growth. To address this, community banks must invest in marketing and outreach efforts to increase awareness and educate potential customers about the benefits of community banking. Overall, the community banking market is poised for growth, fueled by these trends and the continued need for financial inclusion and localized banking services. The market report forecasts market size, historical data spanning from 2018 - 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
Community banks play a vital role in the financial sector, particularly in serving the needs of small businesses, metropolitan, rural, and micropolitan areas. These financial institutions focus on providing personalized services to their customers, often with a local touch. In recent years, community banks have adopted advanced technology to stay competitive. Internet banking and mobile banking have become essential services, allowing customers to access their accounts from anywhere. Remote deposit capture is another technology that has gained popularity, enabling customers to deposit checks using their smartphones. The economic recession led to a shift in consumer behavior, with more people relying on digital channels for banking services. This trend is expected to continue, putting pressure on community banks to invest in technology. However, community banks face challenges such as lower interest rates and higher fees, which can impact their profitability. Microlending is another area where community banks can differentiate themselves, offering loans to small businesses and individuals who may not qualify for loans from big banks. Overall, the community banking market is evolving, with a focus on technology and innovation while maintaining the personalized services that set community banks apart.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market share growth of the metropolitan segment will be significant during the forecast period. A metropolitan area is a region that consists of a densely populated urban agglomeration and its surrounding territories sharing industries, commercial areas, CRE (Commercial Real Estate), transport networks, infrastructures, and housing. The advent of mobile banking platforms and e-wallets in metropolitan cities led modern customers to increasingly prefer online transactions such as payments through websites or mobile applications.
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The metropolitan segment was valued at USD 397.10 billion in 2018. Banks and FIs (Financial Institutions) are prioritizing investments in the development of online platforms for their retail users, Customers prefer to carry out financial transactions online, as they are time-saving. Strong security measures, simple and quick login, site availability, integration of all services on the same site, clear and intuitive layout, and comprehensive information are some of the attributes that retail users prefer. Such factors will support the market growth during the forecast period.
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North America is estimated to contribute 59% to the growth of the global market during the market forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Community banks play a vital role in the financial landscape, particularly in metropolitan, rural, and micropolitan areas. They focus on providing personalized services to small businesses, agriculture, and individual depositors. Despite the economic recession, community banks have continued to attract deposits, thanks to their commitment to competitive rates and reasonable fees. Advanced technology, such as internet banking and mobile banking, have become essential tools for these FIs to stay competitive. Remote deposit capture is another technology that has gained popularity, enabling customers to deposit checks using their smartphones. While big banks invest heavily in advanced technology, community banks often rely on microlending and local expertise to differentiate themselves. In summary, community banks serve an essential function in the financial sector, offering personalized services and competitive rates to their customers, while leveraging technology to meet evolving banking needs.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rise in the adoption of microlending in developing nations is notably driving market growth and trends. Microlending is changing the lifestyle of various people in the developing nations of APAC, South America, and MEA by helping them financially. In addition, a wave in government initiatives for microlending in various countries is driving the growth of the global microlending market. Furthermore, the increase in the number of microlenders helps various emerging countries to reduce poverty and also improves the standard of living of poor people.
Moreover, various farmers in African countries are adopting microlending for buying crops, which will drive the global microlending market growth. In addition, people in rural areas are availing of loans from microlenders to set up their own businesses and raise their standard of living, which propels the growth of the market. This trend is expected to continue during the forecast period.
The rising adoption of digital platforms is the key trend in the market. Due to the growing use of smartphones, computers, Internet access, Internet of Things (IoT) devices, and artificial intelligence, there is an increasing demand for digital banking. Banks and financial institutions are shifting from conventional networks to digital and automated platforms as they offer several benefits, including higher productivity, cost savings, and improved income possibilities.
The need for these technologies has expanded in the market as a result of the recent expansion of cloud computing and storage. The COVID-19 pandemic has increased online banking activity and forced organizations and individuals who had previously opposed Internet banking to adopt digital banking as their new standard procedure, which will positively impact the growth of the global market in focus during the forecast period.
Lack of awareness about community banking services is a major challenge impeding the market. Community banking is majorly beneficial for low-income groups. However, services face major challenges due to the lack of awareness among the population about financial services. Customers do not have sufficient knowledge of how community banking services work or understand the loan process.
On the other hand, many service representatives at the field service level do not know the rules and regulations, such as pricing regulations. As a result, the lack of awareness is becoming a key challenge in banking services, which will negatively impact the market growth during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BCB Bank - The company offers community banking services that provide financial support to the construction business, commercial mortgages, and small to medium business enterprises.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Community banks play a vital role in the financial landscape, particularly in serving the needs of small businesses, agriculture, and individuals in metropolitan, rural, and micropolitan areas. During economic recessions, community banks have proven to be resilient, maintaining a strong connection with their local customer base. Deposits remain a significant source of income for community banks. However, to remain competitive, they are embracing advanced technology such as internet banking and mobile banking. Remote deposit capture, for instance, allows customers to deposit checks using their smartphones, enhancing convenience. Despite the adoption of technology, community banks differentiate themselves from big banks by offering personalized services and competitive rates and fees. Microlending is another area where community banks excel, providing loans to small businesses and individuals who may not qualify for loans from larger financial institutions. Advanced technology continues to shape community banking, with the potential for further innovation. For instance, artificial intelligence and machine learning could be used to improve customer service and risk assessment. However, the implementation of such technology comes with challenges, including costs and regulatory compliance. In conclusion, community banks continue to be an essential part of the financial services sector, serving the unique needs of their local communities. By embracing technology while maintaining their personalized approach, they can remain competitive and thrive in an ever-changing financial landscape.
Market Scope |
|
Report Coverage |
Details |
Page number |
156 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.96% |
Market growth 2024-2028 |
USD 247.1 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.27 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 59% |
Key countries |
US, India, Canada, China, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bay Community Bancorp, BCB Bank, Bendigo and Adelaide Bank Ltd., Beyond Bank Australia Ltd, Coastal Financial Corp., CSBS, Dime Community Bancshares inc., First Community Bankshares Inc., Fiserv Inc., Flint Community Bank, Holland and Knight LLP, HSBC Holdings Plc, JPMorgan Chase and Co., Morton Community Bank, PRIDE MICROFINANCE LTD., Sound Financial Bancorp Inc, Summit Community Bank, The Co-operative Bank Plc, West Central Georgia Bank, and Wintrust Financial Corp |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Area
7 Market Segmentation by Sector
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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