Swiss financial centre: innovative despite mounting challenges

The study “New innovation models”, commissioned by the State Secretariat for Education, Research and Innovation (SERI), identifies a strong and broadly based innovative power within the Swiss financial centre as a whole. Banks, insurers and fintechs are continually refining their products, services and processes in order to stay ahead of the game in an intensely competitive environment where the pressure of technological change is high. They innovate primarily through gradual, incremental improvements that contribute to the sector’s stability, efficiency and customer proximity. These are selectively complemented by fintech companies with a more radical approach to innovation. This interplay makes the financial centre as a whole more adaptable and encourages productive competition to find the best solutions. Customer-driven dynamics play a less important role, particularly in insurance.

Technology, sustainability and cooperation as key drivers
Technological developments such as cloud-based infrastructures and artificial intelligence applications are gaining importance all across the sector. When it comes to practical implementation, however, insufficient data quality and a lack of qualified experts are preventing banks from unlocking their innovation potential.

Sustainability is also a significant factor affecting momentum. Here too, though, progress is being hampered by unavailable or inadequate data, disparate standards and limited empirical evidence. This makes it harder to ensure the transparency and scalability of sustainable innovation.

The importance of cooperation, meanwhile, is growing. Banks and insurers are increasingly working with other companies and academic institutions on innovation projects. Cooperations with direct competitors, on the other hand, remain the exception.

Operating frameworks vital to future innovation
The study also shows that the repeated tightening of regulatory requirements is making innovation in the financial sector much more difficult. It increases the cost of innovation, makes projects harder to plan and results in a greater need for highly qualified staff. The companies surveyed do not believe that support from the public sector is especially relevant. Financial institutions are barely making use of the available programmes. Economic prospects and sound funding are seen as much more crucial.

Overall, the study underscores the strength of the Swiss financial centre but also clearly highlights specific areas with room for improvement. As regards the government, these include in particular access to talents, for example through continual investment in tertiary education and relaxed immigration rules for non-EU students graduating from Swiss universities. Other areas include leaner and more stable regulatory frameworks and more targeted use of Innosuisse’s instruments for promoting partnerships between academia and the financial sector. Furthermore, measures to enhance data sharing and expand open data approaches among authorities – while respecting data sovereignty – can speed up AI and technology-based innovation. That said, the sector must also create frameworks to facilitate the funding of innovation projects and encourage investment in new technologies.