Consolidation in Swiss banking is continuing at a steady rate, statistics provided by the central bank show. But the effects are not only felt by the companies.
The trend towards fewer but larger banks in Switzerland is more than just an anecdote – the Swiss National Bank (SNB) on Thursday released the annual banking statistics, which showed that the number of regional, foreign-controlled and private banks declined in 2018.
In total, Switzerland counted 248 banks last year, down 5 units from 2017. The number of regional as well as foreign-controlled banks fell by half in a little more than two decades – two numbers that stand out in the SNB release.
The End of Banking Secrecy
One reason for this sharp drop is the pressure on margins in retail banking. The firms are struggling to keep up with ever tighter regulation and were forced to spend big on legal and compliance. It is small surprise that the trend is towards larger unit in Swiss banking.
Foreign banks by contrast will have reconsidered their business partly because Switzerland pulled the plug on offshore banking, introducing the so-called automatic exchange of information.
High Street Branch Closures
The changes in banking have had a considerable effect on the number of high-street branches, the statistics of the SNB also showed. Switzerland counted 2,512 branches in 2018, 70 fewer than in 2017, or a drop by 2.7 percent.
Cantonal banks were responsible for the closure of 15 branches, big banking shuttered 16 and Raiffeisen 19 branches. The trend evidently is industry-wide and likely a function of a change in consumer behavior. Today, bank clients increasingly depend on e-banking or even use their mobile phones to conduct their banking business.
Job Cuts
The consolidation in Swiss banking and closure of branches is weighing on the number of jobs available in the industry. The SNB counted 56,238 men and 34,421 women in Swiss banking last year, plus an additional 16,727 working abroad.
The number of men working at banks in Switzerland dropped by about a 1,000 last year, while the number of women was down a little over 100. In 1990, almost 120,000 people worked in the banking industry in Switzerland – the industry has lost a quarter of its workforce in less than three decades. Over the same period, the number of jobs at Swiss banks abroad doubled.
