Switzerland is known as a nation of banks and money. This country has long been a popular place to invest money and keep a foreign account. This is also due to the high degree of discretion that financial institutions offer their customers. Swiss banking has become quite complex over the years. The market is divided into different segments and each canton has its own financial institutions as well. There are complex banking structures with connections that are extremely difficult to understand for non-insiders.
An overview of banking in Switzerland
Big banking houses
Switzerland’s banking sector is divided into many different areas. The big banks are not only the most influential institutions, but also lay the foundations for the rest of the market as they set key interest rates and other fundamental parameters. However, their influence is not as strong as in other countries where similar banks operate. In Switzerland, it is mainly the cantonal and Raiffeisen banks that exert the greatest influence on a local level..
Raiffeisen banks in particular are very complex; there are 316 different Raiffeisen banks if the current count can be relied upon correctly. However, Raiffeisen banks are also organised under the umbrella organisation of Raiffeisen Switzerland. Even though each individual bank is independent, they share a common infrastructure as far as IT and refinancing are concerned.
There are also many cantonal banks. There is no networking between these banks so that, legally speaking, they are really independent banks that act without a common purpose. Cantonal banks primarily serve private clients in the individual cantons and are also popular with many self-employed and freelancers. In addition, they also ensure a supply of cash in the most remote regions, since they operate ATMs and are licensed to distribute card terminals and other digital means of payment.
Regional and savings banks
There are 63 different banks regional and savings banks, 36 of which are members of the Association of Swiss Regional Banks. These institutions have, however, not given up their independence as a result of their association. The association merely provides common foundations, but the regional and savings banks act on their own account and are therefore not subject to a central controlling body that monitors their activities.
Of course, there are also many international banks that have set up branches in Switzerland or taken over another bank. However, their market share is comparatively small. Furthermore, there are certain other special and brokerage banks that do not have too much to do with retail banking. Wealth banking is also a special field of banking that specializes in managing funds and creating assets.
A brief look at some banks
So which banks do what and what is there to know about them? In the following paragraphs, we take a closer look at and provide you with more information on a few of the existing banks in Switzerland.
UBS is one of the most important banks in Switzerland. Founded in 1862, this bank is an acronym for the Union de banques suisses and thus represents a large network of banks that are now organised into a single company. The bank is managed as a public limited company and employs about 60,000 people in Switzerland. Headquartered in Zurich, the bank has several branches in different parts of the country and is active in the private, business and large financial sectors.
Zurich Cantonal Bank
The Zurich Cantonal Bank is a key representative of the cantonal banks. It has existed since 1870 and is a public body under public law. With 5,000 employees and a comprehensive network of vending machines and branches, this bank provides the primary means of obtaining cash and payment for people in the canton of Zurich. The bank is also sub-divided into various subsidiaries, which in turn offer other financial products. This cantonal bank is also known for its extensive range of credit types and asset management products.
The EEK Bank is a leading representative of savings and regional banks. It is headquartered in Berne and employs some 40 people, but has a balance sheet of more than CHF 1.3 billion per year. The bank was founded in 1829 and is one of the oldest remaining banks in this sector. The services offered are primarily aimed at private customers with a focus on capital formation and credit. The mortgage business is also important, as many people in the Berne area take out a loan from this institution.
Spar + Leihkasse Gürbetal
Spar + Leihkasse Gürbetal is one of the smallest banking institutions in Switzerland. Founded in 1926, this bank is currently operated by a team of a mere 13 employees. Moreover, there are only two branches. Their main business is in the private and business customer area. In particular, small and medium-sized companies from local regions keep their accounts here. This institution is also very popular as a mortgage bank. Locals turn to this institute for financing requests. Despite its size, the bank itself is managed as a public limited company (AG) and its balance sheets are fairly moderate. It should be noted that their scope of activities has not changed much in the last 80 years.
There is a lot more you need to know about banking in Switzerland
These are just a few examples and there are so many more banks to talk about. However, this sample should be enough to show what the size ratios of Swiss banks are. Basically, this system has some special advantages over the structures of other countries, because the wide choice of banks enables people to make better choices and to take advantage of new offers.