The UK consumer banking market, encompassing a broad range of services from personal loans and mortgages to savings accounts and credit cards, is a dynamic and competitive landscape. While precise figures for market size and CAGR are absent, a reasonable estimate based on industry reports and similar developed economies suggests a 2025 market value exceeding £500 billion. The market's growth is propelled by several key drivers. Rising disposable incomes and a growing population fuel demand for financial products. Technological advancements, such as open banking and fintech innovations, are reshaping customer expectations and driving efficiency within the industry, leading to the adoption of digital banking and personalized financial management tools. Furthermore, changing regulatory landscapes, focusing on increased consumer protection and financial inclusion, are influencing market dynamics. However, the market faces certain headwinds. Intense competition among established players and emerging fintech companies keeps profit margins under pressure. Economic uncertainty, particularly fluctuating interest rates and potential recessionary periods, can significantly impact consumer spending and borrowing behavior, affecting the overall market growth. Stringent regulatory compliance and cybersecurity threats pose additional challenges for banks. Despite these constraints, the long-term outlook for the UK consumer banking market remains positive, driven by the sustained need for financial services, technological innovation, and evolving consumer preferences. Segmentation within the market, based on product type, customer demographics, and geographical location, presents opportunities for targeted growth and market penetration. The listed banks, including established players like Allied Irish Bank (UK) and newer entrants like Metro Bank, are constantly adapting their strategies to navigate this dynamic environment.

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Retail Banking IT Spending Market Size 2025-2029

The retail banking it spending market size is forecast to increase by USD 14.64 billion at a CAGR of 4.6% between 2024 and 2029.

The market is experiencing significant growth, driven by the increasing need for greater customer satisfaction through personalized services and digital offerings. This trend is further fueled by the incorporation of advanced analytics into third-party banking software, enabling institutions to gain valuable insights into customer behavior and preferences. However, this digital transformation comes with challenges, particularly in the areas of data privacy and security. As financial institutions continue to invest in IT solutions to meet evolving customer demands, they must also prioritize security measures to protect sensitive customer information. Companies seeking to capitalize on this market opportunity must stay abreast of the latest technologies and regulatory requirements, while also addressing the growing concerns around data privacy and security. Effective strategic planning and operational execution will be crucial for retail banks to navigate these challenges and succeed in this dynamic market.

What will be the Size of the Retail Banking IT Spending Market during the forecast period?

Request Free SampleThe market is experiencing significant growth as financial institutions prioritize technology investments to enhance customer experience, operational efficiency, and competitive position. With increasing interest rates and inflationary pressure, net interest margins remain a crucial revenue stream for retail banks. However, customer satisfaction and service propositions are key differentiators in a market where external stimuli, such as digital transformation and changing consumer preferences, continue to shape the landscape. IT spending in retail banking is focused on IT hardware and software, with a shift towards cloud solutions and mobile banking to improve accessibility and convenience. Data analytics and cybersecurity measures are also critical investments to mitigate risks and provide personalized offerings. Retail banks are embracing IT services to stay competitive, with a focus on digital transformation and the implementation of innovative technologies such as artificial intelligence, autonomous banking, blockchain technology, and biometric authentication. The integration of these advanced IT solutions aims to streamline banking operations, enhance security, and create value propositions that cater to evolving customer needs.

How is this Retail Banking IT Spending Industry segmented?

The retail banking it spending industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. TypeIT servicesIT hardwareIT softwareApplicationApplication development and maintenanceSoftware deployment and supportInternal operationsChannel managementOthersGeographyNorth AmericaUSCanadaEuropeFranceGermanyItalyThe NetherlandsUKAPACChinaIndiaJapanMiddle East and AfricaSouth America

By Type Insights

The it services segment is estimated to witness significant growth during the forecast period.In the retail banking sector, IT spending continues to be a significant investment area, driven by factors such as interest rates, net interest, inflationary pressure, and customer experience. IT services, including application development and maintenance, system integration, IT consulting, software deployment and support, and hardware deployment and support, dominate IT spending. IT consulting services experienced a 10% year-over-year growth in 2023, surpassing the overall IT services spend growth of 8.8%. Key players, such as Accenture, Capgemini, Cognizant, EPAM, Grid Dynamics, and HCL Tech, expanded their artificial intelligence (AI) capabilities in Q2 2023, with many collaborating with Google Cloud to enhance their offerings. Technological advancements, consumer preferences, economic developments, and revenue streams influence retail banking IT spending. IT workforce, cloud spending, production volume, and operational efficiency are essential components of retail banking IT spending. Digital transformation through technologies like artificial intelligence, data analytics, cloud native ecosystem, infrastructure as code, cloud migration, containerization technologies, threat detection, prevention technologies, data encryption, blockchain technology, and fraud protection are shaping the retail banking landscape. Customer relationship management, online transaction systems, mobile banking, and digital banking are crucial customer experience propositions. Consumer expectations for seamless digital experiences and enhanced security are driving the adoption of these technologies.

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The non-depository financing industry's revenue has contracted at a projected compound annual rate of 2.1% over the five years through 2024-25. The COVID-19 outbreak caused a large drop in borrowing in 2020-21 as consumers faced a lack of spending opportunities, outweighing the gains from businesses taking out additional loans to stay afloat. The industry has also faced stronger regulatory oversight to combat the proliferation of overly risky and expensive loans. The cost-of-living crisis has caused consumer lending to swell as households rely on short-term borrowing to make up for weakened savings and costs outpacing wages. Soaring interest rates have caused the cost of mortgages to skyrocket, damaging revenue as buyers pull back and lenders are more cautious. The Non-Depository Financing industry's revenue is estimated to climb by 1.7% in 2024-25 – and is expected to total £6.7 billion. This comes from the much-anticipated sliding down of interest rates that will aid the mortgage market and big returns from newer sectors like OpenAI and sustainable technologies. Industry revenue is expected to swell at a compound annual rate of 2.4% to £7.6 billion over the five years through 2029-30. The need for credit is set to be supported by the previous erosion of savings from spiked inflation, leading to more loans needed for sizeable investments as confidence rebounds. Non-depositary financing companies will continue facing stiff competition from other types of lenders, like peer-to-peer lenders. The regulation constricting payday loans will continue to push services towards a lower margin and higher volume approach, aiding those with lower credit scores but dented industry profit. The high cost of mortgages and economic headwinds will settle and start to rebuild the housing market, supporting revenue.

Growing sales of smartphones, Wi-Fi routers and modems have supported electronic equipment wholesalers. Technology advancements and new smartphone model launches have encouraged people to update their handsets more frequently. The replacement cycles of electronic goods have been shortening, with businesses and consumers aiming to keep up-to-date with the latest technology. However, UK business confidence had slipped to its lowest level in over two years in March 2025, according to the Institute of Chartered Accountants in England and Wales. Concerns about tax increases and US President Trump’s trade war have led many companies to hold off on investment, hurting wholesalers’ sales of office supplies. Over the five years through 2025-26, revenue is forecast to contract at a compound annual rate of 0.2% to £19.1 billion. Consumer electronics sales declined during the cost-of-living crisis in 2022-23, but they are gradually rebounding in 2025-26 as inflation eases and household incomes increase. In response to improving economic conditions, the Bank of England reduced its interest rate from 4.5% in February 2025 to 4.25% in May 2025, releasing some disposable income for consumer spending. Nevertheless, price sensitivity remains elevated, prompting businesses to collaborate closely with suppliers to control costs and transfer any savings to customers. In 2025-26, revenue is anticipated to grow by 1.1%. This projection aligns with the Bank of England's forecast of a declining inflation rate for the same period. As inflationary pressures ease, a resurgence in consumer and business demand is set to drive modest revenue expansion. Over the five years through 2030-31, revenue is forecast to grow at a compound annual rate of 2.7% to £21.8 billion. Confidence in global markets is set to recover as inflationary pressures begin to subside. This will encourage businesses to invest and upgrade their technology. As industrial production ramps up to meet global demand, purchase costs could shrink. This adjustment could expand wholesalers’ profit margin. Wholesalers will benefit from the expansion of 5G networks by processing orders more quickly and responding more effectively to market demand. However, upgrading their infrastructure requires both time and financial investment. Major telecom operators, including BT and Vodafone, are partnering with wholesalers like Premier Farnell to supply the devices needed for businesses and households to connect to the enhanced network.

This analysis presents a rigorous exploration of financial data, incorporating a diverse range of statistical features. By providing a robust foundation, it facilitates advanced research and innovative modeling techniques within the field of finance.

Metro Bank (MTRO) on the Move: Can the UK Challenger Bank Keep Pace?

Financial data:

• Historical daily stock prices (open, high, low, close, volume)

• Fundamental data (e.g., market capitalization, price to earnings P/E ratio, dividend yield, earnings per share EPS, price to earnings growth, debt-to-equity ratio, price-to-book ratio, current ratio, free cash flow, projected earnings growth, return on equity, dividend payout ratio, price to sales ratio, credit rating)

• Technical indicators (e.g., moving averages, RSI, MACD, average directional index, aroon oscillator, stochastic oscillator, on-balance volume, accumulation/distribution A/D line, parabolic SAR indicator, bollinger bands indicators, fibonacci, williams percent range, commodity channel index)

Machine learning features:

• Feature engineering based on financial data and technical indicators

• Sentiment analysis data from social media and news articles

• Macroeconomic data (e.g., GDP, unemployment rate, interest rates, consumer spending, building permits, consumer confidence, inflation, producer price index, money supply, home sales, retail sales, bond yields)

Potential Applications:

• Stock price prediction

• Portfolio optimization

• Algorithmic trading

• Market sentiment analysis

• Risk management

Use Cases:

• Researchers investigating the effectiveness of machine learning in stock market prediction

• Analysts developing quantitative trading Buy/Sell strategies

• Individuals interested in building their own stock market prediction models

• Students learning about machine learning and financial applications

Additional Notes:

• The dataset may include different levels of granularity (e.g., daily, hourly)

• Data cleaning and preprocessing are essential before model training

• Regular updates are recommended to maintain the accuracy and relevance of the data

Industry revenue is expected to balloon at a compound annual rate of 46.4% over the five years through 2025-26. This huge jump is attributed to the base year being 2020-21, a year in which UK residents spent most of their time in national lockdown during the COVID-19 pandemic. This resulted in casinos shutting their doors as consumers were confined to their households, meaning revenue plummeted, skewing the five-year figure. After COVID-19 pandemic restrictions were lifted in 2021-22, casinos continued to face low consumer demand as inflation remained high over the two years through 2022-23, lowering demand for discretionary spending on leisure activities like casinos. Stricter regulatory reforms introduced to protect player safety have also tarnished casinos' reputations in recent years, lowering footfall and demand for non-remote sites. In 2025-26, casinos are set to see demand edge upwards as inflation edges back to target and consumer confidence rises. The Bank of England’s interest rate cuts will encourage spending and lead to more consumers valuing leisure activities, including casinos. The rebound of UK tourism in recent years has also inched up demand for casinos, particularly amongst higher-spending VIP consumers. Consequently, revenue is expected to grow by 2.3% in 2025-26, to reach £1.1 billion. The casino industry is expected to expand at a compound annual growth rate of 3.9% over the five years to 2030-31 to £1.3 billion. Looking ahead, the threat of online casinos will continue to grow, impacting their profitability. However, by adapting their digital offerings through promoting online platforms to compete with the growing online competition and by enhancing player safety, non-remote casinos can reach a larger target audience, avoid fines and promote safe gambling, which may attract players and drive revenue. Casinos are expanding their hospitality offerings and by creating a more rounded leisure experience, they can drive footfall and lift revenue. Traditional casinos' ability to innovate digitally and adapt to new consumer demands will be crucial in capitalising on emerging opportunities while navigating the evolving landscape. Regulatory reforms will also place cost pressures on casinos. Increasing levies and licensing fees casinos will face higher compliance costs, weighing on profit for the industry.

In 2024, the annual inflation rate for the United Kingdom was 2.5 percent, with the average rate for 2025 predicted to rise to 3.2 percent, revised upwards from an earlier prediction of 2.6 percent. The UK has only recently recovered from a period of elevated inflation, which saw the CPI rate reach 9.1 percent in 2022, and 7.3 percent in 2023. Despite an uptick in inflation expected in 2025, the inflation rate is expected to fall to 2.1 percent in 2026, and two percent between 2027 and 2029. UK inflation crisis Between 2021 and 2023, inflation surged in the UK, reaching a 41-year-high of 11.1 percent in October 2022. Although inflation fell to more usual levels by 2024, prices in the UK had already increased by over 20 percent relative to the start of the crisis. The two main drivers of price increases during this time were food and energy inflation, two of the main spending areas of UK households. Although food and energy prices came down quite sharply in 2023, underlying core inflation, which measures prices rises without food and energy, remained slightly above the headline inflation rate throughout 2024, suggesting some aspects of inflation had become embedded in the UK economy. Inflation rises across in the world in 2022 The UK was not alone in suffering from runaway inflation over the last few years. From late 2021 onwards, various factors converged to encourage a global acceleration of prices, leading to the ongoing inflation crisis. Blocked-up supply chains were one of the main factors as the world emerged from the COVID-19 pandemic. This was followed by energy and food inflation skyrocketing after Russia's invasion of Ukraine. Central bank interest rates were raised globally in response to the problem, possibly putting an end to the era of cheap money that has defined monetary policy since the financial crash of 2008.

Over the five years through 2024-25, industry revenue is expected to contract at a compound annual rate of 3.4%. Catering services’ revenue has faced great turmoil due to staffing shortages, high inflation and the cost-of-living crisis. Inflationary pressures have limited the amount individuals and businesses spend on their events, including catering, significantly weighing on industry performance, especially in 2023-24. Rising business costs due to inflation and wage pressures have created a harsh environment for catering businesses, causing many to consolidate or close down, as passing prices on to consumers with tightening incomes hasn’t been an option. While inflationary pressures have supported revenue growth for some catering companies that pass the price increases onto consumers, others are experiencing reduced income opportunities as consumers and businesses cut back on non-essential spending amid low confidence. However, consumers' growing health and sustainability awareness is resulting in new caterers entering the industry and existing caterers offering premium-priced organic and meat-free catering options, supporting their growth and innovation. Alongside inflationary pressures, hiked wage costs have pushed up operating costs for caterers, constraining profit growth. Catering service providers mostly hire labour on zero- or part-time contracts to mitigate rising labour costs driven by industry-wide labour shortages. In 2024-25, industry revenue is expected to grow by 1.5%, reaching just under £1.4 billion and profit is anticipated to reach 7.5%. Industry revenue is expected to climb at a compound annual rate of 3.2% over the five years through 2029-30 to £1.6 billion. Labour shortages and rising wages remain key points of concern for the industry, with the National Living Wage set to increase in April 2025. However, the Bank of England cutting interest rates and predicting the inflation rate to fall to 2% in the second half of 2025 will boost business and consumer confidence, encouraging spending on catering services in 2025-26 and beyond. As economic conditions improve, rises in disposable income will also drive demand for catering services. A growing number of private equity companies, will likely invest in catering services, through acquiring smaller competitors, due to high growth potential. As health and sustainability awareness grows, companies will expand their product line to capture the growing market.

Revenue is forecast to edge up at a compound annual rate of 0.1% over the five years through 2024-25 to £4.4 billion. Painters' revenue tends to fluctuate in line with economic and investment trends. Economic uncertainty initially caused by the COVID-19 pandemic and later exacerbated by the Russia-Ukraine conflict reduced confidence in both businesses and consumers, triggering reduced spending and causing consumers to accelerate their uptake in DIY projects. However, supportive government policies aimed at the UK's housing market allowed painting contractors to expand revenue, limiting decline. Revenue dipped in 2020-21 due to the pandemic and subsequent disruptions caused by lockdown restrictions. Although revenue bounced back, the recovery rate has slowed due to significant inflationary pressures, which have spurred businesses and households to cut spending and keep budgets trimmed. Supply chain disruptions have resulted in inflated construction material prices, hitting painting contractors’ average profit margin. Also, persistent inflation has led the Bank of England to raise the interest rate, ramping up the cost of borrowing and, in turn, reducing investment opportunities from the residential and commercial market. Many home and small business owners have increasingly taken up their own painting projects to cut non-essential spending. However, as inflation slows, consumer and business confidence is reigniting, stimulating an increase in renovation projects and benefitting painters' revenue prospects. In 2024-25, revenue is forecast to grow by 3.3% Over the five years through 2029-30, revenue is expected to expand at a compound annual rate of 3.7% to £5.2 billion. Ongoing public sector support for housebuilding, infrastructure developments and public non-residential schemes will support long-term revenue prospects for painting contractors. However, lingering uncertainties will continue to drive the DIY trend into the short term, somewhat dampening revenue growth prospects. In the long term, stable inflation should lead to lower interest rates, which will stimulate greater investment in properties and help painting contractors secure more contracts.

The Consumer Electronics Manufacturing industry has struggled over the years because of plummeting consumer confidence and fierce international competition. This industry operates globally, fulfilling most domestic demands through imports. Manufacturers outside the UK often operate from low-cost countries, gaining the upper hand in economies of scale and selling their products at competitive prices. The UK industry has focused heavily on research and development and automation to keep pace with innovation. On the bright side, consumer interest in home sound systems has climbed, pushing sales. In 2020-21, revenue took a hit of 33.7% as the pandemic disrupted supply chains and hit consumer confidence, critically impacting production and sales. Despite robust recovery in 2021-22, driven by a boost in consumer confidence and the economy's gradual reopening, the industry continues to suffer from low consumer confidence and rising inflationary pressures. Revenue growth in 2024-25 is expected to be 4.7%, boosted by strong demand for audio equipment, at which the UK excels. Factors like cost-of-living pressures have limited revenue growth by dampening discretionary spending. UK electronics manufacturers are moving their manufacturing activities overseas to increase productivity and minimise input costs. Revenue is forecast to decline at a compound annual rate of 1.2% over the five years through 2024-25 to £805.7 million. Domestic consumer electronics manufacturing's short-term challenge is the expected persistence of rising inflation, which will dampen sales. However, according to the Bank of England, the inflation rate should return to 2% by 2025-26, suggesting medium-term growth. Revenue is expected to expand at a compound annual rate of 2.1% over the five years through 2029-30 to £893.4 million. Manufacturers are likely to continue outsourcing production to Eastern Europe and East Asia to offset the impact of escalating production costs and surging energy prices.