Merchant Banking Services Market Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, India, UK, France - Size and Forecast 2024-2028

Merchant Banking Services Market Size 2024-2028

The merchant banking services market size is forecast to increase by USD 18.68 billion at a CAGR of 4.83% between 2023 and 2028.

• The market is experiencing significant growth, driven by the increasing number of mergers and acquisitions (M&A) deals worldwide. This trend is particularly prominent In the Asia-Pacific region, where the growing number of unicorn startups presents ample opportunities for merchant banking services. However, this market is not without challenges. Data security concerns are at the forefront, as financial institutions and corporations increasingly rely on digital platforms for transactions and information exchange. Merchant banking services must adapt to these evolving needs by investing in cybersecurity measures and ensuring regulatory compliance. The financial services sector's digital transformation, driven by fintech and artificial intelligence (AI), further boosts market growth.
• Merchant banking services are integral to financial institutions, high-net-worth individuals, investment firms, insurance companies, hedge funds, pension funds, global corporates, and charity organizations. Companies seeking to capitalize on market opportunities and navigate challenges effectively should focus on providing value-added services, such as strategic advice, risk management, and innovative financial solutions. By staying abreast of regulatory changes and market trends, merchant banking institutions can differentiate themselves and build long-term relationships with clients.

What will be the Size of the Merchant Banking Services Market during the forecast period?

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• The market encompasses a range of financial intermediary services provided to businesses, including asset management, corporate advice, credit syndication, loan syndication, portfolio management, and non-resident investment advice. This market caters to various entities, from small and medium enterprises to startups and multinational corporations. Mergers, acquisitions, business restructuring, and initial public offerings (IPOs) frequently necessitate the involvement of merchant banking services. The market's size is substantial, with continuous growth driven by increasing globalization, foreign direct investment, and the expanding role of financial services in international markets. Capital markets and investment climates play a significant role in market dynamics, influencing the demand for merchant banking services.
• High-net-worth individuals and investment firms also contribute to the market's growth, as they seek expert advice and tailored financial solutions. Merchant banking services extend beyond traditional banking institutions, with non-banking players increasingly participating In the market. This competition intensifies the focus on innovation, customized offerings, and value-added services to maintain a competitive edge. Overall, the market is a dynamic and evolving landscape, shaped by the needs of businesses and the ever-changing financial services industry.

How is this Merchant Banking Services Industry segmented?

The merchant banking services industry 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.

• End-user
  • Business
  • Individuals
• Geography
  • APAC
    • China
    • India
  • Europe
    • France
    • UK
  • North America
    • US
  • South America
  • Middle East and Africa

By End-user Insights

The business segment is estimated to witness significant growth during the forecast period.

Merchant banking services cater to large corporate organizations, institutional investors, and small to medium-sized enterprises (SMEs). These financial institutions specialize in trade financing, fundraising, and loan services for business clients. Merchant banks significantly focus on bolstering the economic strength of businesses through various financial solutions. Notably, they exclusively serve business organizations and do not extend services to the general public. Key functions of merchant banking services include portfolio management, which entails the effective management of securities such as bonds, preferred shares, and stocks. Merchant banks offer advisory services to investors to help them make informed investment decisions.

Additionally, mergers and acquisitions, business restructuring, credit syndication, asset management, corporate advice, and loan syndication are other essential services provided by merchant banks. These services play a crucial role In the financial landscape, facilitating international markets, capital markets, investment climates, and foreign direct investment. With the advent of digital transformation technology, fintech providers have entered the market, offering innovative investment strategies and leveraging AI and machine learning for enhanced efficiency.

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The business segment was valued at USD 42.31 billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

APAC is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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Merchant banking services experienced significant growth In the Asia Pacific (APAC) region in 2021, accounting for the largest revenue share. This trend is anticipated to persist during the forecast period, with China being a major contributor. The expansion of global merchant banks in China and India, coupled with a high volume of mergers and acquisitions (M&A) in countries such as Japan, China, South Korea, and India, fueled market growth. In 2020, these countries accounted for over 40% of the total M&A activity in APAC. 

Small and medium enterprises (SMEs), startups, and global corporates in APAC increasingly seek merchant banking services for asset management, business restructuring, credit syndication, loan syndication, portfolio management, corporate advice, and investment strategies. Merchant banking services also cater to high-net-worth individuals, pension funds, insurance companies, hedge funds, mutual funds, and charity organizations.

Market Dynamics

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.

What are the key market drivers leading to the rise In the adoption of Merchant Banking Services Industry?

• Increased adoption in M&A deals is the key driver of the market. Merchant banking services have gained significant traction among large enterprises, as they offer cost advantages and expert advisory services for Mergers and Acquisitions (M&A) deals. Traditionally, enterprises managed M&A proceedings in-house, storing essential documents in physical data rooms. However, the increasing volume of M&A transactions and the need for efficient risk management and cost savings have led enterprises to outsource these services to merchant banks.
• Merchant banks provide valuable advisory services and due diligence data, enabling enterprises to make informed decisions during M&A transactions. The outsourcing trend is expected to continue, fueled by the inherent cost savings and the expertise merchant banks bring to the table.

What are the market trends shaping the Merchant Banking Services Industry?

• Growing number of unicorn startups in APAC is the upcoming market trend. The market in leading Asian Pacific (APAC) countries, including China and India, is witnessing significant growth with an increasing number of mergers and acquisitions (M&A) activities. The number of M&A deals in India has risen by over 30% since 2004. Furthermore, APAC's representation In the global unicorn index is noteworthy, with India ranking third worldwide in 2021, boasting 54 new unicorns. China, on the other hand, led APAC with 74 new unicorns, and two of the highest valued global unicorns, ByteDance Ltd.
• And Ant Group CO., Ltd., are based in China. Major cities in APAC, such as Beijing, Shanghai, and Shenzhen, are significant contributors to the global unicorn index. This trend signifies the dynamic and thriving business environment in APAC, making it an attractive region for merchant banking services.

What challenges does the Merchant Banking Services Industry face during its growth?

• Increasing data security concerns is a key challenge affecting the industry growth. Merchant banking services have become essential for businesses to manage their financial transactions and administrative tasks. However, the use of these services comes with data security concerns. companies are given access control to a firm's business data to perform their duties, but the trust issue remains a significant factor when bringing on a new provider. The market has seen a rise in security breaches and privacy invasions during the COVID-19 pandemic. For instance, Morgan Stanley paid USD 60 million in a data breach lawsuit in January 2022.
• Despite the assurance of top-notch security standards from merchant banking service providers, organizations must ensure data protection measures to mitigate risks. The importance of data security cannot be overstated, and it is crucial for businesses to conduct thorough due diligence before partnering with a company.

Exclusive Customer Landscape

The merchant banking services market forecasting report includes the adoption lifecycle of the market, market growth and forecasting, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the merchant banking services market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, merchant banking services market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence In the industry.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Bank of America Corp.
• Canara Bank
• Citigroup Inc.
• DBS Bank Ltd
• Deutsche Bank AG
• ICICI Bank Ltd.
• JPMorgan Chase and Co.
• Morgan Stanley
• Punjab National Bank
• The Goldman Sachs Group Inc.
• UBS Group AG
• Wells Fargo and Co.

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 industry 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.

Research Analyst Overview

Merchant banking services have emerged as a critical component of the financial services landscape, catering to the unique needs of businesses and organizations across various sectors. This market encompasses a broad range of financial solutions, including asset management, credit syndication, portfolio management, corporate advice, and more. The market exhibits a dynamic and evolving nature, driven by various factors. One significant trend is the increasing demand from small and medium enterprises (SMEs) and startups for specialized financial services. These businesses often require tailored solutions to support their growth and expansion plans. Merchant banks have responded by offering customized services, such as business restructuring and IPO participation, to help these entities navigate complex financial landscapes.

Another factor influencing the market is the growing importance of digital transformation and fintech. The adoption of advanced technologies like artificial intelligence (AI) and machine learning has revolutionized the way financial institutions operate, enabling more efficient and effective service delivery. Merchant banks are investing In these technologies to enhance their offerings and meet the evolving needs of their clients. The market also caters to a diverse range of clients, including mutual funds, pension funds, global corporates, charity organizations, high-net-worth individuals (HNWIs), and more. Each client segment requires unique investment strategies and financial solutions, which merchant banks address through their specialized expertise and customized offerings.

In the international markets, foreign direct investment (FDI) plays a crucial role in driving demand for merchant banking services. As businesses expand their operations across borders, they require guidance on navigating foreign investment climates and capital markets. Merchant banks offer invaluable insights and advice, helping clients make informed decisions and mitigate risks. The market is highly competitive, with a diverse range of providers, including banks, non-banking financial institutions, investment firms, insurance companies, hedge funds, and more. Each provider offers a unique value proposition, catering to specific client needs and market niches. Despite the competitive landscape, the market remains an attractive proposition for new entrants.

The growing demand for specialized financial solutions and the increasing adoption of digital technologies present significant opportunities for innovation and growth. In summary, the market is a dynamic and evolving landscape, driven by various factors, including the needs of SMEs and startups, digital transformation, and the globalization of business. Merchant banks play a crucial role in providing customized financial solutions to a diverse range of clients, helping them navigate complex financial landscapes and achieve their business objectives.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the industry during the forecast period
• Detailed information on factors that will drive the growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market and its contribution of the industry in focus to the parent market
• Accurate predictions about upcoming growth and trends and changes in consumer behaviour
• Growth of the market across APAC, Europe, North America, South America, and Middle East and Africa
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the merchant banking services market growth of industry companies

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