Switzerland has more than 260 banks, and consumers can handle their daily credit transactions in more than 3,000 branches. But the Swiss banking landscape is increasingly in transition – also thanks to the Internet.
The Swiss banking sector includes a variety of banking institutions with different business models and a wide range of services. In addition to the two major Swiss banks, Credit Suisse and UBS, we now have 24 cantonal banks, 62 regional banks and savings banks, seven private bankers, one Raiffeisen bank and many other domestic and foreign financial institutions.
All Swiss banks approved by the Swiss Financial Market Supervisory Authority (FINMA) are affiliated to the German deposit guarantee scheme, which, according to the Consumer Credit Act (KKG), protects loans for up to CHF 80,000, for example. Of the 24 cantonal banks in Switzerland, 21 also have unlimited government guarantees.
New challenges for the Swiss banking sector
However, banks in Switzerland have been facing major challenges for years: rising regulatory costs, negative interest rates, falling margins, rising customer demands, digitization, political and legal uncertainties during the Brexit negotiations, and uncertainty about future US policies. All this will drive structural restructuring in the financial sector in the coming years. In terms of investment and credit, the established banks have already gotten new competitors.
Banks and intermediaries – online institutes on the rise
For a long time, consumers have no longer been bound by traditional branch business. For example, many banks and brokers are currently also offering their businesses via their own online portals. Most of all, personal loans are available online today. Cashgate, for example, which belongs to Raiffeisen Switzerland and the Cantonal Banks, or Bank-now, the subsidiary of Credit Suisse, and Cembra Money Bank – to name but a few examples.
In many cases, credit institutions even broker their investments and loans exclusively online via their home page – for example eny Finance AG, Migros Bank or bob Money. All of these, for example, only offer their personal loans as modern online loans, where interest rates are generally variable and criteria for the amount of interest vary widely from provider to provider.
On the other hand, there are no online shops that still serve Switzerland’s regional cantonal banks such as the Valais Cantonal Bank, the Zurich Cantonal Bank or the Geneva and Jurassic Cantonal Banks. Most of the regionally active cantonal banks continue to rely on customer advice by meeting and direct contact in the bank.
New Financial Trend – Peer-to-Peer and Landing
Modern online platforms have also made completely new business models possible for several years. A relatively new trend in the credit market in Switzerland, for example, are loans from private individuals to private individuals. These so-called peer-to-peer loans are brokered for example on online platforms such as Cashare AG, CreditGate24 and Lend.
These new online service providers bring private and private investors together quickly and easily. Here consumers receive their credit from private individuals or SMEs – and no longer from a traditional bank. Also, the interest rates are not strictly predetermined, but negotiated by supply and demand in concrete loan project with written loan agreement itself. Conversely, entrepreneurs or start-ups can advertise in such online platforms for potential financiers.
Safety is still high on the list
Consumers, however, do not have to worry. Because for online banks or novel peer-to-peer platforms also apply all the rules of the consumer credit law (KKG), especially in terms of liquidity, money laundering and credit check. In order to take advantage of this novel service, credit seekers, such as lenders, must properly register and previously submit all the data required for the credit check online.
New banking in the interests of the consumer
Up-and-coming comparison portals such as the German start-up CAPITALO have an eye on such novel trends in the Swiss banking market. The aim here is to show the classic Swiss consumer new opportunities, for example in borrowing, and to make the process of providing credit as fast, simple and secure as possible. And this applies to both Swiss citizens, as well as for cross-border commuters and interested parties with other residence status.