IFBC Insights – Current challenges in the Swiss banking environment

Banks CFOs operate in a field of tension between comprehensive areas of activity and the challenges posed by the market environment. A survey of CFOs at Swiss banks identified the key current challenges.

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Key Takeaways

• The digitalization of business processes emerges from the survey as the biggest challenge
• In addition, the focus is increasingly shifting to ensuring cyber security and changing customer needs as a result of technological progress
• The integration of artificial intelligence into operational processes is still in the testing phase
• In the area of compliance with existing regulatory requirements and potential future tightening, respondents see key challenges
• The shortage of skilled workers is challenging banks depending on their location - but the changing values of Gen Z are hardly an issue
• Blockchain, cryptocurrencies and competition from FinTechs and platforms are of subordinate relevance for CFOs

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The most important trends that emerged from the expert discussions with CFOs from Swiss banks can be structured into four areas:

1. Technology
2. Regulation
3. Economic conditions
4. Society

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1. Technology

The digitalization of existing processes is the dominant trend in the banking sector. CFOs see the automation and digitalization of business processes across all areas as the biggest challenge. In addition, the focus is increasingly shifting to ensuring cyber security and changing customer needs as a result of technological progress. For many banks, the integration of artificial intelligence into operational processes is only in the testing phase for selected areas of application. Although more and more products and services are being offered in the areas of blockchain and cryptocurrencies, customer interest is limited. Competition from FinTechs and platforms is currently of subordinate relevance to the CFOs surveyed.

2. Regulation

Compliance with existing regulatory requirements is a key challenge facing the CFOs of Swiss banks. The majority of CFOs surveyed consider this to be one of the biggest challenges. For the future, the banks' CFOs identify potential tightening of regulatory requirements and a possible abolition of the proportionality of regulations (differentiation of regulatory requirements according to bank size) as key risks.

3. Economic conditions

The changing interest rate environment is a global trend that also affects Swiss banks. Despite the resulting challenges, CFOs consider the general economic environment in Switzerland to be stable. One critical factor, however, is the liquidity situation on the markets, which is leading to higher refinancing costs. One of the reasons identified for the worsening liquidity situation is the liquidity requirements of the new major Swiss bank.

4. Society

The shortage of skilled workers poses major problems  for banks in Switzerland. However, the impact of these challenges varies  depending on the geographical location of the institutions surveyed. Even  though the sustainability trend plays a central role in other sectors, only a  few CFOs of the banks surveyed see this as a challenge for their day-to-day  business. Only the stricter regulations in this area pose a challenge for  bank CFOs. In terms of products and services, a sustainability offering is  provided, but customer interest remains relatively low.  

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IFBC supports its clients from the banking sector in mastering the identified challenges.

For detailed insights from thestudy and benchmarks, contact: Christian Hirzel and Noel Sager.

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More information about our offering for Financial Services.

Also of interest to you, our article on Value-based Management.

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