#Digital transformation

“Banking Trends in Emerging Markets” SBS’s 2018 survey

Dec 05, 2018
Sopra Banking Software

A comprehensive study identifies 2017 as a turning point for key markets and trends

Paris, 5th December 2018 – Sopra Banking Software, global leader in digital banking and financing software, today released the findings of its annual Banking Trends in Emerging Markets survey.  

Encompassing more than 800 banks and 71 countries, this year’s survey examines banking and finance trends from 2007 to 2017, from the global financial crisis and its aftermath to reconstruction. This new survey also focuses on banking trends in the BRIC* countries and Africa. 

Jean-Marc Velasque, author of the survey and Consulting Director at Sopra Banking Software, commented:  

“We created this survey in 2006 to help our clients to better understand the financial landscape and identify opportunities in key markets around the world. Since then, we have expanded the survey’s size and scope so that, for our banking clients, it has become a precious aid for making informed strategic decisions.”  

Among the key findings in this latest survey:  

I. Over the past 10 years on a net basis, emerging markets have opened 122,000 bank branches while Western Europe closed 41,000. 

II. 2017 marked a turning point in three different areas:  

1) Branch network growth in emerging markets 

  • As technology advances facilitate emergence of digital and mobile banking services, and  
  • As 30% of banks reassess and reorganize their branch networks to enhance client coverage and efficiency. 

2) The first drop in 10 years of revenue per branch in emerging markets overall  

  • Notably due to inflation, currency devaluations and the economic situation in Latin America. 

3) Over the 10-year period, banking profitability performances were mixed 

  • BRIC countries posted their worst performance in 10 years, 
  • Eastern Europe posted its best results since 2008,  
  • Africa remained the most profitable region. 

III. While Africa has long been the most dynamic region in terms of new branch openings, in 2017  – for the first time – adult population growth outpaced branch network growth  

  • After doubling the number of their branches, banks in Africa — which have mainly expanded in major cities – are taking advantage of technology breakthroughs to deploy additional distribution channels  
  • Still, Ivory Coast topped the list of all 71 countries in terms of network expansion in 2017, with an average 11% increase in banking branches 

Sopra Banking Software’s annual Banking Trends in Emerging Markets survey is unique in its breadth and depth. For this latest survey, a total of 816 banks and 568,000 branches in 71 countries and 5 geographic areas – Africa, Asia, Eastern Europe, Latin America, and the Middle East — were studied over the 10-year period. To be included in the survey, countries were evaluated based on their revenue per capita, economic growth rate, and level or maturity of the financial sector in their economy.  

*BRIC: Brazil, Russia, India, China