Swiss Banks Versus Fintech and Digitization

The SNB Survey

                After the FINMA granted two, very first licenses to Swiss crypto banks last month, the Swiss National Bank published the report on fintech and digitization processes among Swiss banking. Timing was just perfect. The main outcome of the SNB study is that the industry is stalled, and it hasn’t progressed as much as it should or planned to and the digital revolution has yet to arrive to Swiss banking. The survey was conducted among 34 banks in the last quarter of 2018.

Banks Are Aware That They Have to Change

                Swiss banks know that they have to change and become more competitive in order to keep up with very strong and constantly developing crypto market. They expect to remain the dominant power in the financial industry, but they know new players will force them to further squeeze margins. Adopting fintech and digitalization might help boost more consolidation in the sector, according to the SNB’s analysts. The swiss banking sector is also aware that customers require them to change and offer even better products, enhanced by digital possibilities. There comes time to invest in more efficient, but at the same time cheaper, processes.

No Big Disruption Yet

                As of now no big disruption happened on the market, even though many fintech companies, big tech, digital banks entered the landscape. However, no such process is expected by traditional Swiss banks, that don’t see a threat of being marginalized by disruptive digital forces entering the market. They do believe though that these new players will make them better as they will be forced to improve in terms of offering. Also, there is fragmentation coming ahead – introduction of fintech players and digital banks will make clients eager to compare many offers and services online and buy the best one – having various banking solutions form different providers, not just relying on the offer of one bank.

This trend is clearly visible at ExchangeMarket.ch. Our customers decide to exchange money with ExchangeMarket.ch because the EUR CHF exchange rate which is much better than at traditional banks. With the currency converter, our customers can quickly check how much they can save.

That will make banks more modern and digital. When it comes to aspirations, according to the SNB survey, bigger banks are more eager to introduce high level of digitization rather than smaller banks. Also, big players in banking sector want to arm clients with their native solutions, whereas small banks are eager to co-operate with other entities and rely on outsourcing. What is quite remarkable is the fact that none of the strategies of researched banks included adoption of Blockchain, artificial intelligence or cloud computing to the major degree.

Focused on More Traditional Solutions

                Instead banks remain focused on developing more traditional service and transferring them to digital version, like mortgage services, payments etc. Digital payments are the area which progressed the most so far. The next step ahead is improving customer interface so that, for instance, mortgages can be applied for online and instant replies will be provided to customers.