Zurich: home of institutional asset management in Switzerland

Matthew Feargrieve on recent personnel changes and product launches in Switzerland’s financial services sector: a new era in Swiss banking and asset management?

Matthew Feargrieve

SWITZERLAND, the home of UHNW private banking. Not so much a place renowned for its retail banking services or financial products. Just try finding an ATM in any Swiss city. Or when you go online, try making a same-day transfer between your savings and checking accounts. Or try being impressed by Credit Suisse’s new “range” of ETFs, announced last week.

So last week this blog opined that, when it comes to financial products for retail customers, Switzerland had to try harder:

That was last week. And a week is a long time in Swiss banking, it would seem. Last week, finews.ch was reporting the departure of Tidjane Thiam from Credit Suisse. It is true was Tidjane Thiam has proved to be a controversial figure in the Swiss banking sector. One has the impression that his departure from Credit Suisse was precipitated by personal reasons which, if Mr Thiam cared to elaborate on them, would not shine a complimentary light on the culture of senior management in Switzerland’s banks.

But it is Thiam’s original appointment as Credit Suisse’s CEO back in 2015, not his departure five years later, that is truly significant. What was remarkable in 2015 was the elevation of an outsider to one of the top banking jobs in Switzerland. Thiam, as a French-Ivorian, surely represented a radical choice of CEO, causing ripples across the upper echelons of Swiss banking. But his appointment was, outwardly at least, a forward-looking and globalistic move by Credit Suisse. It was generally well-received by the markets outside of Switzerland.

The past five years have shown the Swiss financial services industry moving into a phase that this blog has described as “post- UBS affair”, the latter being a watershed in the aftermath of which a hard core of old-school banker in Switzerland retired, but not before handing the mantle to a younger generation of financial professionals. With the demise of the “secrecy” model, finance professionals in Switzerland have had to work hard to promote attractive, transparent financial products that are capable of competing with the value propositions of Singapore and Hong Kong, Luxembourg and Ireland, as well as the offshore centres of Cayman, Jersey and Guernsey. (Oh, and Liechtenstein, to an extent that is relevant only to germanophone, central European banking.)

In the past week, following news of Thiam’s exit from Credit Suisse, we have also read about Zeno Staub and his ambitions to make Vontobel a “pure-play” provider of financial services that can compete in a digital age; about the possibility of a Goldman Sachs entry into Switzerland with its retail banking offering Marcus; and about Revolut, the Anglo-Russian challenger bank, and the seismic impact its smartphone banking and currency app has had in Switzerland, with upwards of 270,000 customers in the country. Not to mention the banking apps now provided to around 300,000 Swiss customers by Neon and Bank Cler’s Zak, as well as Germany’s N26, according to finews.ch:

These developments in retail banking in Switzerland, being forged by disruptive outsiders, will be welcomed by retail customers in Switzerland who are well-used to receiving an expensive, inefficient and second-rate service by the established players. They come at a time of negative interest rates (a concept that could have been dreamt up only in Switzerland) and which have been threatening to punish small investors and small businesses in Switzerland for some time. Retail customers and global investors alike will be encouraged to see these developments, and how one of Switzerland’s top two banks, Credit Suisse under the leadership of incoming Thomas Gottstein, will respond to the challenges. How the other bastion of Swiss banking, UBS, will respond under its new CEO, remains to be seen, per this report by swissinfo.ch:

Matthew Feargrieve is an investment funds consultant. You can read more of his blogs here: