Market Trends of United States Private Banking Industry
Rising Number of HNWIs Driving the Market
- Private banking is a team of professionals who deliver private banking and wealth management services to high-net-worth individuals and families, from banking and cash management to lending, investment strategies, and trust and wealth advisory services.
- Many large banks target private banking services because of the increasing wealth of individuals and the relative profitability of private banking businesses. A high net-worth individual is at least USD 1 million in liquid assets, excluding personal assets such as a primary residence.
- Investors with liquid assets of less than USD 1 million but more than USD 100,000 are considered sub-HNWIs. Very high-net-worth individuals include a net worth of at least USD 5 million, while ultra-high-net-worth individuals are worth at least USD 30 million. Thus, the increase in HNWIs in the United States is expected to drive the need for private banking services.
Increasing Disposable Income Drives Market Growth
Disposable income, denoting the funds left with individuals or households post-tax deductions, holds significance. With rising disposable incomes, individuals gain more financial flexibility, enabling them to save and invest in financial assets. This trend has notably fueled the expansion of the private banking sector. Banks, recognizing this trend, have taken steps to bolster bank deposits, further propelling the growth of private banking. As disposable incomes surge, individuals are amassing substantial wealth, rendering them potential clients for private banking services. Moreover, this rise in disposable incomes also broadens the pool of high-net-worth and ultra-high-net-worth individuals, thereby expanding the market scope for private banks.
