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Digitisation

Digitisation

In today’s world, digital innovations are a prerequisite for ensuring Switzerland’s competitiveness – a fact that also applies to the financial sector. For the Swiss financial centre to maintain its leading international position, the framework conditions for technological innovations must be excellent in worldwide comparison. That is why digitalisation is a core strategic topic for the Swiss Bankers Association.

The importance of “digitalisation”

Digital innovations in the financial sector are part of a series of technology-driven changes taking place in various sectors: journalism, the hotel industry and transportation services have all been impacted by the technological and structural change seen in recent years. In the wake of these developments, new markets, products and services are emerging to the benefit of the customer. For existing market participants, the rules of the game are changing accordingly.

Seizing opportunities

Efficiency gains and innovative product offerings that are attuned to customer needs provide opportunities for Swiss banks. Particularly in light of declining margins and growing competition with existing and new financial services providers.

The Swiss banks have positioned themselves well in recent years in terms of digitalisation . They offer a combination of new digital possibilities and the firmly-established strengths of “Swiss banking”, such as financial expertise, discretion and reliability. These are prerequisites for ensuring that Switzerland remains a leading financial centre in the future. The fact that Switzerland is currently one of the most important fintech locations in the world is one example that reflects the strength of the financial centre in the area of digitalisation. An up-to-date overview of the Swiss fintech start-up scene can be found here.

The role of the Swiss Bankers Association (SBA)

The Swiss Bankers Association plays an active role in developing strategies in areas relevant to the future competitiveness of the Swiss banking. An expert commission of the SBA is developing the foundations for the strategic and tactical positioning and opinion forming to this end. The SBA advocates for commensurate, principles-based regulation to ensure the continued competitiveness of the Swiss financial centre and its stakeholders. In doing so, the SBA makes a substantial contribution to strengthening and further developing Switzerland as a leading global financial centre. The association has defined several areas for action with a focus on digitalisation:

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Distributed ledger technology/blockchain

DLT/blockchain offers the financial industry numerous opportunities in the form of promising use cases relating to both the development of new business models and to increasing the efficiency of the activities they have pursued to date.

Cloud computing – Swiss Cloud

Using cloud services increases the competitiveness of the banking sector. The cloud service pro-viders are in the starting blocks. To successfully migrate the banks’ IT to the cloud, a number of legal challenges must now be resolved.

Cybersecurity

With increased digitalisation and the rise in criminal activity, the risk of cyberattacks is growing. The private sector must therefore step up its efforts to defend itself against this risk accordingly. The Swiss Bankers Association recommends that measures be taken to this end in five strategic areas. These relate primarily to the banking sector, however, the economy as a whole will benefit. The key to success in this area will be close collaboration between the authorities and the private sector.

Open banking and standardised interfaces (APIs)

Open banking is an opportunity for the Swiss financial centre. Swiss financial institutions are in-novative and well equipped to meet the emerging needs of customers to the greatest extent pos-sible. Standardised interfaces make an important contribution to the efficient development of open banking services.

RegTech

Behind the buzzword RegTech (regulatory technology) lies enormous potential for innovative digital solutions in the area of regulation. In the highly-regulated financial sector, banks and other service providers are continuously confronted with increasing regulatory requirements, which go hand in hand with risk management and compliance expenses. A large part of these costs arises in the areas of “The cash handling and anti-money laundering (AML) regulations” and “Foreign custom-ers and tax compliance”.Conclusion: If RegTech is implemented nationwide, supervision and compliance will improve, and will do so at significantly lower costs.