While numerous Swiss retail banks were still considering a system change in 2022, a clear majority now favors continuity. This is shown by a comparison of two surveys conducted by the Institute of Financial Services Zug (IFZ) at Lucerne University of Applied Sciences and Arts.

According to the current 2026 survey, around two-thirds of the participating banks expect that they will still be working with their current core banking system in ten years' time. This share has roughly doubled compared with the 2022 survey.

 The findings come from the new IFZ study, “Core Banking Systems 2026,” which was presented in Zurich on 27 October and has been publicly available since 28 October.

Four years ago, the willingness to switch was significantly higher

In 2022, the situation was still different. At that time, ten percent of the institutions surveyed could imagine switching their core banking system by 2027. Another 26 percent considered a switch between 2027 and 2029 likely, and another 32 percent between 2029 and 2032. In total, around 68 percent of the banks surveyed at the time expected a possible system change by 2032.

The skepticism toward existing systems had understandable reasons. While banks valued their stability and range of functions, they also criticized high costs, outdated technical architectures and slow development cycles.

In particular, the so-called monolithic systems, whose core functions are closely interconnected, increasingly came to be seen as an obstacle to the rapid rollout of new digital offerings.

Avaloq and Finnova regain trust

Today, banks apparently view the situation much more positively. According to the study authors, the two providers particularly widespread in Switzerland, Avaloq and Finnova, as well as other established firms, have made progress. They have better addressed their customers' needs and made their technological development plans more transparent.

At the same time, the hoped-for alternatives have largely failed to materialize. Four years ago, new core banking systems from European neobanks in particular had raised expectations. But entering the Swiss market proved difficult.

A key obstacle is the so-called Helvetization: international solutions must be adapted to the regulatory, tax and operational specifics of Swiss banking. According to the IFZ, several possible projects failed because of these requirements.

Artificial intelligence could change the rules of the game

However, the study authors Urs Blattmann and Thomas Fischer warn against interpreting the higher level of satisfaction as a lasting guarantee for the established providers.

It may be generative artificial intelligence, of all things, that could fundamentally change the market again. Modern AI tools make it possible to analyze, reprogram and test existing software architectures more quickly.

Until now, the complete development of a core banking system has been regarded as a project requiring at least ten years and investments in the low- to triple-digit millions. AI could shake up that assumption.

The authors refer to an event hosted by Swiss Fintechs Innovations. There, a case from the rail industry was presented in which a monolithic IT solution from 2008 had reportedly been replaced within three months with the help of generative AI. 

Will banks develop their own software in future?

In the view of the study authors, AI could prompt larger financial institutions in particular to think again about developing their own core banking systems.

Instead of merely building additional applications around existing core banking software, individual banks could try to build the technological core itself.

At the same time, AI is likely to help established providers modernize their systems more quickly. New competitors could also benefit, as technological and financial barriers to entry may fall.

The study concludes: in the short term, Avaloq, Finnova and other established providers are more firmly in the saddle than they were four years ago. In the long term, however, AI could call precisely this newly gained security into question.