Competition is a feature of a free economic system in which it's participants focus on innovation, new technologies and processes, in order to increase business efficiency. The banking system is a particularly sensitive market in which any change in the number of market participants and market share can have negative consequences for the development of economic and social structure. Globalization, technological progress, better customer awareness and increasing control of the banking system have led to changes in market trends, and thus encouraged banks to adjust their business operations in order to survive. Changes in business operations can have strong consequences for competition and its concentration in the market, stated changes can lead to a larger imbalance between large national banks and smaller, local ones. In order to ensure the smooth and efficient functioning of the market, it's necessary to provide equal access and business opportunities to all participants. With the accession of the Republic of Croatia to the European Union, regulation of the banking system is not subject exclusively to the Croatian National Bank (HNB) as the sole regulator of competition. In addiotion to the HNB, Croatian Competititon Agency (AZTN) participates in tme supervision of competition in the banking sector as a general regulator. This paper analyzes the competition of the banking system, the concentration of banks in the market, their impact on the market as well as the legal protection of competition. Furthermore, the impact of changes in trends on the operations of the banking system and the impact of changes on the market as a whole will be examined.