We have updated our retail banking Market Opportunities Index (MOI) for 2016. Eight new markets have been added to the MOI, increasing the total coverage to 28 markets globally.
The MOI is a data-driven assessment of key factors that influence the level of opportunity in retail banking markets. The purpose of the MOI is to provide a comprehensive view on current growth prospects by measuring both direct and indirect contributory factors. These include the development stage of the financial market in terms of product penetration, the levels of competition and profitability, its economic fundamentals, the state of its banking infrastructure, and the receptivity of its consumers.
Mexico has retained its position as the leading market for the second year running, despite the gap between second-placed Taiwan being reduced from 12.2 to 7.8 in 2015. This reduction, however, is mainly due to improving conditions in the Taiwanese market rather than deterioration in the Mexican market. Taiwan saw the highest overall increase in its score, which was due to improving profitability and market economics. Other markets with sizable gains in their overall scores were the US, Hong Kong, Sweden, and Denmark. This was again mainly down to improving profitability and market economics.
Turkey, the UAE, and Norway experienced moderate deteriorations in their overall scores, with France and Poland seeing substantial declines. Poland experienced the biggest decline and as a consequence came out of the “high opportunity” market category for 2016. The main reason that markets saw their overall scores decline was decreasing profitability.
From a regional perspective Asia Pacific and North America dominate the top 10, with only one European market present: Germany. Eight of the bottom 10 markets are European. Weak economies, low profitability, and saturated markets have decreased the potential in Europe’s markets. Opportunities do exist in the region, but are mainly confined to Germany and the UK.
The Global Data MOI is part of our Global Retail Banking Analytics tool comprising over 280 banks in 28 markets.
By Sean Harrison, Retail Banking Analyst