Opportunities and risks
Digital customer experience and rising international economic momentum as key opportunities
According to the experts, opportunities for the Swiss banking industry in the next 12 months lie in the digital customer experience, neutral monetary policy and a pick-up in international economic growth. Risks to income, meanwhile, stem from pressure on interest margins and the increasing density of regulation.
Further improvements in the customer experience thanks to digital channels were cited last year as the best opportunity for the Swiss banking industry to achieve income growth, and this view has become even more pronounced in 2024. Two new opportunities this year are the pick-up in international economic growth and Switzerland’s return to a neutral monetary policy, both of which are expected to bolster demand for banking services. The most significant change in the financial market experts’ views on income opportunities relates to cryptocurrencies. Whereas only 13% believed that these would increase investment volumes in last year’s survey, the figure has shot up to 50% this year, probably as a result of rising prices and higher customer demand. On the other hand, attitudes towards sustainable finance are much more ambivalent than last year. Only just under half of the experts now think that it can attract further customer segments to high-margin products, compared with more than 80% in 2023. The experts are evenly split on the question of whether sustainable products are important and unimportant as a source of income.
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When it comes to risks, the experts pinpoint the increasing density and complexity of regulation as notable cost drivers. Compared with last year’s survey, regulatory density is seen as an even greater risk to income this year, with all experts rating it “important” or “very important”. The respondents’ risk analysis confirms the clear conclusion drawn in the business outlook regarding the interest rate situation, i.e. that further cuts will put added pressure on margins. Lower rates, together with structurally and historically low net interest margins, are an especially significant challenge for domestically oriented banks. The experts generally view the risks associated with discount banks and technology firms increasingly gaining a foothold on the financial market as significant, although the perceived importance of these risks has fallen slightly since last year. This is because some discount banks serve different customer segments to traditional banks. As regards technology firms entering the market, the focus to date has been on payment apps. Since these still require a bank account, the banks remain part of the value chain – often serving to guarantee trust, in fact.