Regulation as an opportunity for Swiss private banks

Regulation as an opportunity for Swiss private banks

New cross-border provisions and tax demands from abroad have been placing increasing pressure on Swiss private banks over the past few years. Developments show that transnational regulation of export-oriented private banks has become a reality. This year’s private banking study conducted by KPMG and the University of St. Gallen (HSG) reveals that the sector can continue to be successful in the future despite, or perhaps because of, this regulation.

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Entitled “The Future of Swiss Private Banking – Turning Regulation into Value”, this latest private banking study conducted by KPMG and the Institute of Management of the University of St. Gallen (HSG) analyzes the major challenges, some even existential in nature, faced by Swiss private banks. The question is how transnational regulations can be transformed into opportunities for banks and their clients. Their implementation should be geared toward a principles-based approach. “We anticipate that added value can be created at the operational level. Standardization will help, particularly in the areas of big data and digitalization,” says Philipp Rickert, Head of Financial Services and Member of the Executive Committee at KPMG Switzerland. “Process automation will improve both the quality and efficiency of data processing which will have a positive impact on the services provided to clients.” The data this yields will lay an interesting foundation for determining clients’ behaviors, wants and needs. “Because of that, the implementation of transnational regulations cannot simply be regarded as optional. Instead, it’s a crucial element of a sustainable, successful Swiss private banking model,” adds Rickert.

Positive attitude among private banks

The private banking study examines aspects which will be pivotal to the success of private banking activities in the near future while also identifying areas where action needs to be taken as a result. The study’s key findings:

  • Nine out of ten of those surveyed feel that the implementation of transnational regulations improves Switzerland’s reputation as a financial center and promotes its recognition as a clean place to do business. Yet only 26% of those surveyed think that uniform regulations around the globe will give Swiss private banks more opportunities to distinguish themselves on an international stage.
  • 73% of the respondents indicated that implementation should follow a differentiated, principles-based approach. The political realm, regulators and banks should get actively involved in the transnational regulation process at an early stage in order to promote the private banking industry’s ability to compete.
  • 66% of the survey’s respondents expect regulation to create greater transparency for clients and help them select and evaluate services. 84% anticipate an increase in the range of services offered, including some that are not traditionally associated with banks. The existing business model needs to be scrutinized and adapted where necessary.
  • 90% of those interviewed felt that larger volumes of data would open the doors to dynamic, more greatly differentiated client segmentation and thus improve banks’ ability to understand clients’ wants and needs. More information about clients is needed to comply with future regulations like the Federal Financial Services Act (FFSA/FIDLEG), for example.
  • Only one in four people surveyed frequently uses electronic devices during client advisory meetings. That means that client advisors would also need to be trained and equipped with the technology required for this changed role.
  • 58% think that banks can learn from other sectors how to set up efficient processes and sales channels in order to cut costs. Automation, standardization and digitalization are tools that can help strike a balance between regulatory requirements, client expectations and high-quality workflows.
  • 77% believe that digitalization will cause communications between clients and relationship managers to become more frequent and more extensive in the future. Of the multitude of different communication channels available, clients should be able to choose the ones they want to use.

The challenges facing Switzerland’s banking industry are well known. Access to foreign clients is essential for banks’ survival. Their business models need to be refined and focused on core markets, products and segments. Technology will play a central role in their efforts to remain efficient and offer high-quality services. It is up to banks to shift their focus back to clients, advise them based on their wants and needs and serve them with commitment in a way that is both transparent and ethical. Clients are ready to pay for good services, yet in return they want to experience a top-notch client relationship. Switzerland will continue to be an attractive financial center in the future, as well, in no small part due to the country’s stability, professionalism and high service quality. 


The study entitled “Future of Swiss Private Banking – Turning Regulation into Value” was conducted jointly by KPMG and the Institute of Management of the University of St. Gallen (HSG). It is based on a combination of interviews and an online survey and comprises around 50 banks. Switzerland’s two biggest banks were not included in the study.

The Future of Swiss Private Banking: Turning regulation into value

The Future of Swiss Private Banking: Turning regulation into value

“The Future of Swiss Private Banking: Turning regulation into value” demonstrates how the industry can remain successful despite regulations.

© 2016 KPMG Holding AG is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.

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