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The online magazine of the Swiss Bankers Association
2018/04/10 01:10:00 GMT+2

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Swiss private banking in international comparison

Swiss private banking in international comparison

Both the Swiss business location and financial centre hold leading positions in international comparison. An analysis conducted by the SBA of a number of existing rankings now shows where exactly Switzerland stands in comparison to other financial centres and where it needs to improve.

There are currently a number of different rankings that assess the competitiveness of global financial centres. These benchmarks are generally conducted on the basis of various factors that are relevant to financial centres. Although such rankings can sometimes be characterised by subjective assessments, they nonetheless provide general indications in terms of the quality of a location.

Concrete areas for action identified

It is against this backdrop that a working group of the Swiss Bankers Association (SBA) examined a large number of existing and publicly available indices and studies regarding various success factors for private banking. The objective of the analysis was to gain a consolidated overview of all the factors and Switzerland’s respective positioning in comparison to the competing financial centres. To this end, factors were examined for which internationally accepted standards exist, such as the implementation of the automatic exchange of information (AEOI), as were traditional locational and competitive factors such as the tax environment. The results are not intended to be used only as a promotional instrument for the sector, but more importantly, to identify concrete areas for action to be taken by the government, regulators and not least, by market participants.

Action points to strengthen competitiveness

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Swiss private banking – regulatory competitiveness benchmarking

The sector must remain vigilant

The results of the analysis show that the Swiss wealth management industry remains very well positioned in international comparison, despite the many challenges it faces. This outstanding point of departure may not, however, be considered as invariable or a matter of course. Instead, it must be continuously defended.

The Swiss wealth management industry remains very well positioned.

With regard to the traditional locational factors, clear potential exists for optimisation, particularly in terms of the tax environment and with a view to the possibility of being able to actively provide services in key markets. Moreover, the current, attractive framework conditions in other areas such as digitalisation or the labour market environment, must not be unnecessarily jeopardised.

Looking beyond this aspect, banking is already one of the most regulated sectors in the Swiss economy. To ensure that the domestic banking sector is not at a direct disadvantage vis-à-vis other financial centres, Swiss laws and regulation must therefore not go beyond internationally accepted standards.

Optimal framework conditions and top quality remain key

There is no disputing the fact that the shaping of the domestic regulatory environment has a significant impact on the international competitiveness of a sector. To ensure the Swiss financial centre does not fall behind its competitors, the Swiss authorities must not rush ahead of the relevant financial centres that were compared when it comes to the implementation of international standards and should resolutely forgo a "Swiss finish".

At the same time, financial institutions themselves make an important contribution to achieving the goals for a competitive financial centre by continuing to provide innovative products and outstanding services, as well as by taking responsibility for the integrity of the financial centre. A coordinated approach between the state and the banking sector will ensure that the Swiss financial centre will continue to assert itself in the global competition as a leading centre for wealth management.

The analysis of the SBA working group is published on www.swissbanking.org.

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