The relevance of the financial sector
How many jobs does the Swiss financial sector generate? How high is the value added that is directly and indirectly associated with the activities of banks and insurance companies? And how much does the financial sector contribute to Switzerland’s tax revenue? The study on the “Economic Impact of the Swiss Financial Sector” conducted by BAK Economics on behalf of the Swiss Bankers Association (SBA) and the Swiss Insurance Association (SIA) gives concise answers to these questions.
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Switzerland is one of the leading and most competitive financial centres in the world.
Geneva and Zurich rank 5th and 7th respectively in a European comparison of competitiveness (source: The Global Financial Centers Index, September 2022). The financial sector, consisting of banking and insurance, makes a significant contribution to Switzerland’s prosperity.
In 2021, a gross value added of CHF 92.6 billion was generated (directly and indirectly) along the entire value chains of banks and insurance companies, and 422,100 full-time jobs were associated with the financial sector. The financial sector is one of the most productive industries in the Swiss economy. This is also reflected in the qualification structure. In the financial sector, six out of ten employees have a university degree. Companies in the financial sector are better at recruiting highly qualified workers than the service sector and industry overall. This is confirmed by the latest study conducted by BAK Economics on behalf of the Swiss Bankers Association (SBA) and the Swiss Insurance Association (SIA). Compared to other industries, the financial sector contributes disproportionately to tax revenue in Switzerland. In 2021, taxes levied by the Confederation, cantons and municipalities that were directly or indirectly related to the financial sector increased by a good 15% compared to the previous year, totalling an estimated CHF 19.9 billion. This corresponded to over 13% of total fiscal revenues from the public sector. About CHF 12 billion of this was attributable to taxes from corporate profits and labour income. The Confederation also collected around CHF 7.9 billion in the form of taxes on transactions from the financial sector (e.g. stamp duty and withholding taxes).
The direct economic effects of the financial sector in 2021
Jobs: Employees in full-time equivalents (FTE), nominal gross value added and taxes in CHF bn *refers in the case of taxes to the share of direct taxes of individuals and legal entities.
Source: BAK Economics
Important economic pillar
The financial sector generated gross value added of around CHF 66.7 billion in 2021. This corresponds to a share of 9.4% of Switzerland’s total economic output. This means that every eleventh franc of value added in Switzerland comes from the financial sector. Banks contribute more than half of this (CHF 39.9 billion). Taking into account all direct and indirect effects, the Swiss financial sector generated gross value added of CHF 92.6 billion in 2021, which corresponds to 13% of the economy as a whole. The financial sector is the third largest industry in Switzerland, making it an important pillar of the Swiss economy. It generates more value added than the pharmaceutical industry and the retail trade combined.
Banks and insurance companies are reliable taxpayers
The financial sector also makes a large contribution to Swiss tax revenues. In 2021, CHF 19.9 billion in taxes went to the public purse, which represents around 13% of the total fiscal revenue of the Confederation, cantons and municipalities. Direct taxes from the banking sector amounted to CHF 7.4 billion.
Continued high number of employees in the industry
The importance of the financial sector is also reflected in the high number of employees. In 2021, the financial sector counted 230,600 full-time positions. This means that around 5.5% of all employees in Switzerland work in the financial sector, of which around two thirds or 150,500 are employed by banks.