Switzerland is well known for its banks and money. For many years now, the country has been a popular place for financial investments and foreign accounts. This is due in part to the confidentiality that the banks offer their clients. The banking landscape in Switzerland has become quite complex over the course of time, with the result that the market is divided into different areas. Basically one must take a look at the system from top to bottom, because every canton also has its own financial institutions. The result is an extremely complex network which is extremely difficult for outsiders to understand.
The Swiss banking industry – A fundamental overview
Big banking houses
Switzerland’s banking industry is divided into many different sectors. The big banking houses are not just the most influential banks, they also lay the foundations for the rest of the industry, as they set the base interest rates and other key values. However, they have less influence than their counterparts in other countries. On a local level, the cantonal and Raiffeisen banks are the most influential.
Raiffeisen banks in particular are a very complex topic; if the current count is interpreted correctly, there are 316 different ones. The Raiffeisen banks are organised under the umbrella organisation Raiffeisen Switzerland. Even though the individual banks are independent, they still share a common infrastructure in terms of IT and refinancing.
On the next level, there are also many cantonal banks. However, they are not linked and are legally independent banks operating without a common purpose. They primarily serve private-client business in each canton and are also used by a number of self-employed people and freelancers. In addition, they ensure a regional cash supply – even in the most remote regions – because they operate ATMs and are also responsible for the sale of card terminals and other digital means of payment under licence.
Regional and savings banks
The lowest level includes regional and savings banks. There are 63 of these, 36 of which are organised in the Association of Swiss Regional Banks. However, the institutions still operate independently. The association merely organises common principles, but the respective banks and savings banks act on their own account and are therefore not subject to a central control body which monitors their activities.
Of course, there are also foreign banks in Switzerland that have either set up a branch in Switzerland or taken over another bank. However, their market share is comparatively small. In addition, there are certain effect banks and stock exchange banks that do not really deal too much with retail banking. Asset banks are also a special type of banks that specialise in the management of funds and the formation of assets.
A short overview of some main banks
So which banks are doing what and what is there to know about them? We will take a closer look at a few established banks to give interested readers an opportunity to familiarize themselves with Swiss banks and to learn some important facts.
UBS is one of the most important banks in Switzerland. Founded in 1862, this bank’s acronym refers to the Union de Banques Suisses and thus represents a large group of banks that are now part of a single company. The bank is managed as a stock corporation and employs around 60,000 people in Switzerland. Headquartered in Zurich, the bank operates various branches in different parts of the country. The bank is active in both the private and business sectors and in major financial services.
Cantonal Bank of Zurich
The Cantonal Bank of Zurich is an important cantonal bank. It was founded in 1870 and exists in its corporate form as an institution under public law. With 5,000 employees and an extensive network of ATMs and branches, this bank provides people in the canton of Zurich with basic cash and means of payment. The bank is divided into various subsidiaries, which in turn offer other financial services. This cantonal bank is also known for its extensive range of credit types and asset management services.
EEk bank is an important savings bank and regional bank. It is headquartered in Berne and employs a workforce of only 40, but has annual balances of more than 1.3 billion Swiss francs. The bank was founded in 1829 and is thus one of the oldest banks still operating in this sector. The range of services offered is primarily aimed at private customers, although it also focuses on capital formation and the granting of loans. Its mortgage business is also important, as many people in the Berne area take out a mortgage from this institution.
Gürbetal Savings + Loan Bank
Gürbetal Savings + Loan Bank is one of the smallest entities in the Swiss banking industry. Founded in 1926, this bank is now run by only 13 employees and has only two branches. Their main business is in the private and business sectors. All small and medium-sized enterprises from the regions manage their accounts here and this institution is also very popular as a mortgage bank. People from the region usually turn to this institute for financing requests. Despite its size, the bank itself is managed as a public limited company and generates moderate sums in its balance sheets. It can be noted as a small peculiarity that the scope of activities has not changed much in the last 80 years.
There is more to know about banks in Switzerland
These banks are just a few examples and there are still thousands of others to describe. This excerpt, however, should suffice to illustrate the different sizes of banks in Switzerland. Basically, this system has some special advantages over the structures of other countries, because the variety of institutes allows people a much larger choice and also to adapt to new offers.