Asia is likely to produce 45 percent of all growth in banking revenues between now and 2020. But McKinsey analysis suggests that global banks should focus their efforts on cities across the continent rather than adopt traditional country-driven strategies—as many do at present (exhibit). In both developed Asia1 and China, more than 95 percent of all banking growth will happen in urban areas. In the former, the greatest potential lies in the ten largest cities, though GDP growth will be higher in tier-two ones. The reason is that wealth in these developed economies is concentrated in regional financial hubs, such as Tokyo, Hong Kong, and Singapore. By contrast, the majority of China’s growth (which will be nearly as great as that of emerging and developed Asia combined) will happen in the country’s roughly 150 tier-two cities,2 which track the growth of GDP and population.
