Securing market access to stay competitive

Vanessa Dubra, how important is international business for the Swiss banking industry? 
The expertise of Swiss banks is hugely important in terms of exports. Around 16% of our country’s total service exports originate from the banking industry. This shows how vital the banks’ foreign business is to the economy. We are especially strong – the world leader, in fact – in cross-border wealth management for private clients.

What role does market access play in this success? 
Put simply, without access to foreign markets, our ability to offer services abroad is limited – in some cases, we can’t offer them at all. This not only restricts the banks’ growth potential, it also threatens their international competitiveness. Market access is thus a strategic necessity.

What challenges do you see for the banks when it comes to tapping into other markets? 
The main ones are regulatory hurdles. Many countries have very specific rules, and they vary considerably. The EU is a good example. While our regulation is equivalent in many areas, the prevailing political climate often determines whether it’s actually recognised as such. Many other markets demand a physical presence, which is costly and doesn’t always make strategic sense for the banks.

How is the SBA advocating for open markets? 
We are engaging in dialogue with authorities in Switzerland and abroad and cooperating with partner organisations in the respective markets. We put forward broadly supported solution proposals in political processes and lobby for practicable, forward-looking models. Our aim is to create a level playing field for Swiss banks.

Are any such agreements already in place? 
Yes, there’s the Berne Financial Services Agreement (BFSA) signed with the UK. The SBA was heavily involved in initiating and drafting it. We are proud of the BFSA because it makes cross-border wealth management simpler for a certain category of client, and this forms part of many Swiss banks’ core business.

What is so special about the BFSA? 

Each side acknowledges the equivalence of the other’s regulation, for example with regard to investor protection and market integrity. This means that the UK and Switzerland have equally fair and transparent rules, which builds trust among market participants. The BFSA therefore sets a new standard for flexible, cooperative models in the international financial services business. High-net-worth individuals with cross-border needs in particular are benefiting from the new opportunities this presents.

What solutions are being pursued with the EU? 

The SBA is doing pioneering work here as well. It introduced the concept of an institution-specific approach and is prepared to be heavily involved in developing it. Under this model, Swiss banks that want to provide cross-border services proactively in the EU register with an EU authority and comply with EU regulations. In return, they are allowed to offer their services throughout the EU. The big advantage of this approach is that it creates legal certainty and encourages fair competition. 

What other challenges do you see for the banks? 
Besides regulatory hurdles, geopolitical tensions and sanctions pose certain risks. They could endanger existing business relationships or block access to key markets completely. Banks must therefore think even more strategically and diversify their geographical footprint.

What more is needed to ensure that banks in Switzerland can continue to prosper? 
Decisive, coordinated action on the part of both politicians and the industry is needed. Only by actively seeking out new partnerships, working towards open markets, pursuing new approaches and systematically refining existing models like the BFSA can Switzerland ensure that its financial centre retains a leading international position. The groundwork for this must be done right now.