Swiss Banking System
Swiss banks are internationally well-regarded for their reliability, attitude towards a client’s privacy, and assets. The first banks were established in Switzerland around the mid-18th century. The oldest Swiss bank was Wegelin & Co., which was founded in 1741.
Today, there are more than 300 such financial institutions operating in the country. They are among the global leaders in retail banking, private banking, and asset management.
The work of all banks in Switzerland is controlled by the Swiss Financial Market Supervisory Authority (FINMA). This government body also supervises bank-related activities, securities markets, and investment funds. Apart from FINMA, the Swiss National Bank monitors the implementation of the banking laws, regulations, and standards.
Opening an account in a Swiss bank
Opening an account with a Swiss bank is a clear and simple. However, extensive documentation will be required if one is not a resident of Switzerland. According to Expatica, individuals will have to prove their identity, address, and personal and employment history. Documentation will also need to be authenticated by doing the following:
- getting a notarized copy or an apostille stamp;
- visiting a local branch of the Swiss bank in question; and
- visiting a local branch of a ‘correspondent bank’ selected by the Swiss bank.
Swiss banks can be divided into the following categories: big banks, cantonal banks, regional banks, private banks, and foreign banks.
Big Banks in Switzerland
The two largest and most well-known Swiss banks are Credit Suisse and the Union Bank of Switzerland (UBS). They serve domestic and foreign clients, and account for over half of all the Swiss balance sheets. They are also leaders in wealth management, investment banking, and securities business among individual and corporate clients.
The Raiffeisen Group is the leading retail bank in Switzerland. After Credit Suisse and UBS, it is the third largest bank in Switzerland. This group consists of 246 cooperatively structured Raiffeisen banks and has around 896 branches throughout Switzerland.
Cantonal banks are commercial banks that are largely owned by local authorities. Their major objective is to promote a canton’s economy and are usually serving domestic clients. These banks are not linked, and legally operate in an independent manner. They also ensure a regional cash supply. There are 24 cantonal banks in the 26 cantons of Switzerland, which account for about 30% of the banks in Switzerland. The largest of the cantonal banks is the Zurich Cantonal Bank.
Regional banks are small universal banks that offer savings deposits, mortgages, and corporate loans. They focus on business in one region.
Private banks offer private banking services in the field of asset management for private clients. They do not offer savings deposits. These banks earn most of their revenues from providing fee-based advisory services. Their legal form exists as a collective or as limited partnerships. The first private banks were created in St. Gallen and Geneva in the late 18th century.
Foreign Banks in Switzerland
There are several foreign banks that have representative branches in Switzerland. These banks mostly focus on asset management and investment banking, earning a large portion of their income from fees and commissions. Both the European Union (EU) and Japan have a large percentage of foreign banks within the country.