The Report Covers UK Banks Market Share & Statistics and It is Segmented by Product (Transactional Accounts, Saving Accounts, Debit Cards, Credit Cards, Loans, and Other Products) and Channel (Direct Sales and Distributors).

Over the five years through 2024-25, UK banks' revenue is expected to climb at a compound annual rate of 1.7% to £128.6 billion, including anticipated hike of 2% in 2024-25. After the financial crisis, low interest rates limited banks' interest in loans, hitting income. At the same time, a stricter regulatory environment, including increased capital requirements introduced under the Basel III banking reforms and ring-fencing regulations, constricted lending activity. To protect their profitability, banks have shut the doors of many branches and made substantial job cuts. Following the COVID-19 outbreak, the Bank of England adopted aggressive tightening of monetary policy, hiking interest rates to rein in spiralling inflation. The higher base rate environment lifted borrowing costs, driving interest income for banks, which reported skyrocketing profits in 2023-24. Although profit grew markedly, pressure to pass on higher rates to savers and fierce competition weighed on net interest income at the tail end of the year, the difference between interest paid and interest received. UK banks are set to continue performing well in 2024-25 as the higher interest rate environment maintains healthy interest income, aiding revenue growth. However, net interest income is set to dip marginally due to higher deposit costs and narrow margins on mortgage loans. With further rate cuts priced into markets, savings rates will drop in 2024-25, stemming the drop in net interest income. Over the five years through 2029-30, industry revenue is forecast to swell at a compound annual rate of 3.3% to reach £151.1 billion. Regulatory restrictions, tougher stress tests and stringent lending criteria will also hamper revenue growth. Competition is set to remain fierce — both internally from lenders that deliver their services exclusively via digital channels and externally from alternative finance providers, like peer-to-peer lending platforms. The possibility of legislation like the Edinburgh reforms will drive investment and lending activity in the coming years, if introduced. However, concerns surrounding the repercussions of less stringent capital requirements and the already fragile nature of the UK financial system pose doubt as to whether any significant changes will be made.

The share of female employees in the total workforce composition of Barclays decreased overall between 2016 and 2023. In 2023, 45 percent of the employees were female, which was a three percent decrease compared to 2016.

In 2017, the United Kingdom’s three largest banks accounted for approximately 50 percent of assets held by banks in the region. The UK’s largest bank had total assets valued at 2.1 trillion euros in 2017 and held a market share of 25 percent. In 2017, HSBC was also the largest bank in Europe.

The fall of Europe’s banks

Since the financial crisis, banks need to enhance profitability and ensure financial stability has seen the number of credit institutions fall. This alongside the rise in online banking, the need for physical bank branches has become less relevant. In 2017, Estonia’s physical banks had an average of over 14.5 thousand customers per branch.

The United Kingdom’s finance sector

In 2017, the United Kingdom’s financial services sector employed more than one million employees. Despite the rise of employment in the UK’s financial services sector, bank branches have seen a similar decline to the rest of Europe, with the North West seeing the largest number of branches closed in recent years. Between 1981 and 2018, some banks have seen as much as an 80 percent fall in branches nationwide.

Expert industry market research on the Banks in the UK (2013-2031). Make better business decisions, faster with IBISWorld's industry market research reports, statistics, analysis, data, trends and forecasts.

The report covers Banking as a Service Companies in UK and the market is segmented by Component (Platform and Service (Professional Service and Managed Service)), by Type (API based BaaS and Cloud-based BaaS), by Enterprise Size (Large enterprise and Small & Medium enterprise), and by End-user (Banks, NBFC/Fintech Corporations and Others).

HSBC maintained its position as the largest bank in the United Kingdom by market capitalization from 2001 to 2024. On December 31, 2024, HSBC's market capitalization reached approximately 176.71 billion U.S. dollars, recovering to pre-pandemic levels and reinforcing its status as the largest European bank by market value. Bank market valuations during the pandemic The coronavirus pandemic significantly impacted global banking market capitalizations. In early 2020, the largest European banks experienced sharp declines in market value due to economic uncertainty. The worldwide banking market saw a substantial drop in market capitalization during 2020, with most major banks experiencing similar trends. However, the market began recovering throughout 2021, with banks gradually returning to pre-pandemic valuation levels. The banking industry in the UK The UK banking industry is led by five major chartered banks, increasingly challenged by digital banks like Starling and Monzo. Despite losing some customers domestically, HSBC remains significant - the largest bank in the United Kingdom and one of the world's largest financial institutions.

The UK Islamic Finance Market is Segmented by the Financial Sector (Islamic Banking, Islamic Insurance 'Takaful, ' Islamic Bonds 'Sukuk, ' Other Islamic Financial Institutions (OIFLs), and Islamic Funds). The Report Offers the Value (USD) for the Above Segments.

According to top-tier large corporations executives in the United Kingdom (UK), HSBC was the leading provider of corporate banking services in 2024. HSBC had a market penetration of 71 percent, and it was followed by Barclays and NatWest Group, with market penetrations of 70 percent and 61 percent, respectively. HSBC was also one of the top five banks for corporations in Europe.

Traditional banks in the United Kingdom (UK) had a much higher interest income than digital banks in 2024. According to Statista Financial Market Insights, the net interest income of the traditional banking industry in the UK amounted to roughly 150.74 billion U.S. dollars. In contrast, digital banks had a net interest income of 106.32 billion U.S. dollars. However, according to Statista, the net interest income of traditional banks will decrease in the following years, while digital banks' will increase.

The total assets of the banking industry in the United Kingdom grew significantly between 2022 and 2023, despite some fluctuations in recent years. In 2023, the total assets held at banks amounted to roughly 16.38 trillion U.S. dollars, which was a slight decrease compared to the previous year. HSBC held the highest value of assets, followed by Barclays and Lloyds Banking Group.

The United Kingdom banking as a service (BaaS) platform business size is set to reach US$ 1,545.25 million in 2023. Over the projection period, demand for banking as a service platform solutions is predicted to rise with a CAGR of 16.8%, taking the total valuation in the country to US$ 7,292.29 million by 2033.

2018 to 2022 United Kingdom Banking as a Service Platform Demand Outlook Vs. 2023 to 2033 Forecast

Semi Annual Update

Category-wise Insights

Scope of Report

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Open Banking Market Size 2024-2028

The open banking market size is forecast to increase by USD 57.66 billion at a CAGR of 27.2% between 2023 and 2028. The market is witnessing significant growth due to the increasing demand for advanced Financial Management Tools that offer real-time access to Financial Data from multiple Financial Institutions. Open Banking Solutions, which utilize Open Banking APIs, enable automated savings, real-time transactions, and enhanced security features. The integration of Artificial Intelligence (AI) into these services further streamlines financial management and enhances personalized customer experiences. However, the handling of sensitive personal financial data necessitates strict adherence to guidelines and regulations to ensure data security and privacy. Key market trends include the growing preference for faster and more seamless payment processing, increased focus on data security, and the potential for increased competition among Financial Institutions as they adapt to the Open Banking landscape.

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Open banking, a financial services model that enables third-party providers to access customers' financial data through APIs, is revolutionizing the payment ecosystem. This innovative approach allows for more customer-centric services, personalized financial offerings, and informed financial decisions. Broadband connectivity plays a crucial role in the open banking landscape, ensuring seamless access to real-time data for machine learning algorithms and AI applications. These technologies are integral to the open banking model, as they enable advanced data analytics and the development of innovative financial services. Security is a top priority in the market. Financial institutions are investing heavily in advanced security measures to protect sensitive customer data from online fraud. AI and machine learning algorithms are being employed to detect and prevent fraudulent activities in real-time. E-commerce and open banking are natural partners, with the former benefiting from the real-time financial data access provided by the latter.

Further, open banking APIs are the backbone of this new financial services model, allowing for seamless integration between financial institutions and third-party service providers. These APIs enable the sharing of financial data in a secure and standardized manner, facilitating the development of innovative financial services. Personalized financial services are a key benefit of open banking. By leveraging big data analytics and AI, financial institutions can offer customized offerings tailored to individual customers' financial needs and preferences. In conclusion, open banking is transforming the payment ecosystem by enabling real-time data access, advanced data analytics, and the development of innovative financial services. With a focus on security and customer-centricity, this model is poised to disrupt traditional financial services and reshape the industry landscape.

Market Segmentation

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.

Service

  Banking and capital markets
  Payments
  Digital currencies


Deployment

  On premise
  Cloud


Geography

  North America

    Canada
    US


  Europe

    Germany
    UK


  APAC

    China


  South America



  Middle East and Africa

By Service Insights

The banking and capital markets segment is estimated to witness significant growth during the forecast period. The market is revolutionizing the banking and financial services sector in the global payment ecosystem. Through strategic collaborations and innovative service offerings, Open Banking is enhancing payment processes, expanding investment accessibility, and promoting financial inclusion. In June 2024, Euronet, a leading financial technology and payments provider, partnered with Fintech Galaxy to introduce a new Banking as a Service (BaaS) offering. This collaboration aims to deliver faster, more secure, and cost-effective account-based transactions for banks, fintechs, and merchants. Key features of this service include card as a service, real-time payment processing, and advanced fraud detection. By integrating with consumer bank accounts, this solution reduces transaction costs and promotes financial inclusion, while also driving the adoption of digital transactions in the European region.

The integration of Artificial Intelligence (AI) and Machine Learning (ML) in Open Banking is further fueling the growth of the market. Big data analytics is enabling financial institutions to gain valuable insights into customer behavior and preferences, leading to personalized services and improved customer experience. The use of Open Banking is

The European Challenger Banks Market is segmented by services offered (Payments, Savings Products, Current Account, Consumers Credits, Loans and Others), By end-user type (Business Segment and Personal Segment) and By Geography (UK, Germany, France, Italy, Spain, Netherlands, and Rest of Europe). The Market Size and Forecasts Are Provided in Terms of Value (USD Million) for All the Above Segments.

United Kingdom UK Banks: GD: IP: Money Market Instruments data was reported at 850.000 GBP mn in Jun 2018. This records an increase from the previous number of 669.000 GBP mn for Mar 2018. United Kingdom UK Banks: GD: IP: Money Market Instruments data is updated quarterly, averaging 2,138.000 GBP mn from Mar 1998 (Median) to Jun 2018, with 82 observations. The data reached an all-time high of 4,720.000 GBP mn in Mar 2008 and a record low of 296.000 GBP mn in Dec 2015. United Kingdom UK Banks: GD: IP: Money Market Instruments data remains active status in CEIC and is reported by Bank of England. The data is categorized under Global Database’s United Kingdom – Table UK.KB051: UK Banks Income and Capital Expenditure.

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Community Banking Market Size 2025-2029

The community banking market size is forecast to increase by USD 253 billion, at a CAGR of 5.8% between 2024 and 2029.

The market is experiencing significant growth, driven by key trends such as the increasing adoption of microlending in developing nations and the rising use of digital platforms. Microlending, a type of small loan, is gaining popularity in regions where traditional banking services may not be readily available. Furthermore, the adoption of digital technologies, including cloud computing, is enabling community banks to expand their reach and offer more convenient services to customers. However, there is still a lack of awareness about community banking services in certain areas, which presents a challenge for market growth. Overall, the market is poised for continued expansion as these trends continue to shape the industry landscape.

What will be the Size of the Community Banking Market During the Forecast Period?

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The market encompasses financial institutions that cater to the unique needs of local communities, including metropolitan, rural, and micropolitan areas. With a focus on personalized services, these institutions play a crucial role in the financial landscape, particularly in serving small businesses and individuals who may not have access to resources offered by larger banks. Despite the overall growth of the financial services sector, community banks have faced challenges in recent years. Economic recessions and interest rate fluctuations have impacted deposit growth and profitability. However, community banks have responded by embracing advanced technology, such as Internet banking, mobile banking, and remote deposit capture, to enhance customer convenience and competitiveness.
Additionally, some community banks have expanded their offerings to include microlending and other niche services to differentiate themselves in the market. Fees and rates remain important factors in the market, with consumers and businesses seeking competitive pricing and value-added services. The adoption of technology has enabled community banks to offer more efficient and cost-effective solutions while maintaining a personal touch that sets them apart from big banks. Overall, the market continues to evolve, with a focus on innovation, customer service, and meeting the unique needs of local communities.

How is this Community Banking Industry segmented and which is the largest segment?

The community banking 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.

Area

  Metropolitan
  Rural and micropolitan


Sector

  Small business
  CRE
  Agriculture


Service Type

  Retail banking
  Commercial banking
  Wealth management and financial advisory
  Others


Geography

  North America

    Canada
    Mexico
    US


  APAC

    China
    India
    Japan
    South Korea


  Europe

    Germany
    UK
    France


  South America



  Middle East and Africa

By Area Insights

The metropolitan segment is estimated to witness significant growth during the forecast period. Community banking, comprised of financial institutions (FIs) serving metropolitan, rural, and micropolitan areas, continues to evolve in response to changing customer preferences and economic conditions. With the proliferation of advanced technology, such as Internet banking, mobile banking, remote deposit capture, and microlending, customers increasingly favor digital channels for their financial transactions. Convenience, security, and accessibility are key drivers, as users seek to save time and manage their finances efficiently.
In the retail banking sector, FIs differentiate themselves through enhanced security measures, seamless login processes, site availability, comprehensive information, and integration of various services on a single platform. Additionally, small businesses and agriculture sectors, which are significant contributors to local economies, benefit from community banks' focus on their unique needs. Despite economic recessions, community banks remain a vital part of the financial landscape, providing essential services to their communities.

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The metropolitan segment was valued at USD 412.90 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 55% 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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United Kingdom Banking Sector: RC: Risk Weighted Assets (RWA) data was reported at 2,763.515 GBP bn in Dec 2019. This records a decrease from the previous number of 2,955.599 GBP bn for Sep 2019. United Kingdom Banking Sector: RC: Risk Weighted Assets (RWA) data is updated quarterly, averaging 3,001.079 GBP bn from Mar 2014 (Median) to Dec 2019, with 24 observations. The data reached an all-time high of 3,260.822 GBP bn in Mar 2015 and a record low of 2,763.515 GBP bn in Dec 2019. United Kingdom Banking Sector: RC: Risk Weighted Assets (RWA) data remains active status in CEIC and is reported by Bank of England. The data is categorized under Global Database’s United Kingdom – Table UK.KB063: Banking Sector: Regulatory Capital.

The value of Tier 1 capital in the banking industry in the United Kingdom increased sharply between 2014 and 2023, despite occasional fluctuations. In the third quarter of 2023, the value of Tier 1 capital amounted to approximately 539 billion British pounds, which was a slight increase compared to the previous quarter.

United Kingdom UK Banks: GD: IR: Money Market Instruments data was reported at 423.000 GBP mn in Jun 2018. This records an increase from the previous number of 380.000 GBP mn for Mar 2018. United Kingdom UK Banks: GD: IR: Money Market Instruments data is updated quarterly, averaging 1,176.000 GBP mn from Mar 1998 (Median) to Jun 2018, with 82 observations. The data reached an all-time high of 4,117.000 GBP mn in Sep 1998 and a record low of 155.000 GBP mn in Dec 2015. United Kingdom UK Banks: GD: IR: Money Market Instruments data remains active status in CEIC and is reported by Bank of England. The data is categorized under Global Database’s United Kingdom – Table UK.KB051: UK Banks Income and Capital Expenditure.

Base Year 2023 Forecast Period 2024-2028 Market Growth X.XX%