Despite being ranked this year’s most-innovative economy and boasting a dynamic fintech ecosystem, Switzerland’s residents are still reluctant to joining neobanks and non-traditional banking providers, indicating that digital challengers still have a long way to go before dethroning incumbent banks.
A survey of 1,500 Swiss residents conducted by local finance comparison platform Moneyland.ch found that only a minority of Swiss residents are willing to open a bank account at non-traditional banking services providers such as retailers, neobanks and bigtechs.
The survey participants, which were asked how likely they would be to bank with each of the listed service providers, were found to be the most open to retail groups Migros (27%) and Coop (20%), which scored the highest out of the list of providers.
Swiss pension funds (19%) and insurance companies (18%) were found to be the next most likely candidates for personal banking, followed by Swiss, online-only direct banks (17%), and Revolut (15%).
Greater openness towards neobanks but bigtechs see rising resistance
Despite underwhelming performances, these figures are an improvement compared to 2019 when Moneyland.ch first conducted this survey. At the time, only 6% of residents indicated openness to bank with Revolut.
Comparing 2019 and 2021 figures also show rising resistance towards Swiss insurance companies and pension funds. Less than 20% of residents indicated willingness to use an insurance company or pension fund for banking in 2021, compared to over 30% in 2019.
Readiness to open bank accounts with Google also waned, loosing 5% points between 2019 and 2021.
Overall, tech firms performed poorly this year, with around 80% of survey participants either hardly seeing themselves banking with these companies, or having no interest at all. Banking with airlines is also not an option for most residents.
Results from the Moneyland.ch survey are consistent with findings from a research by Swiss banking technology provider Avaloq, which found that Swiss investors are lagging behind their European counterparts in embracing investment technology services.
The survey, which polled 1,430 investors across 10 countries in Europe and Asia, found that only 8% of Swiss respondents are investing via robo-advisory platforms, behind Germany, France and the UK, where 17%, 10% and 14% of investors, respectively, use robo-advisors.
These results come on the back of the release of the Global Innovation Index 2021, an annual ranking of 130+ economies measuring their innovative capacities. In 2021, Switzerland remained the world’s leader in innovation for the 11th consecutive year, topping the list in information and communications technology (ICT) use and expenditure on education, and leading the region in innovation outputs, and in particular in patent by origin and intellectual property receipts.
Switzerland has been laying out the regulation foundation for fintech company to thrive. This year, the Distributed Ledger Technology (DLT) Act came into force, introducing special provisions for the treatment of crypto-based assets, allowing for innovative DLT trading facilities and paving the way for tokenization of securities.
In 2019, Switzerland introduced the so-called Fintech License, which aims to lower the barriers to market entry for fintech companies while increasing legal certainty for the entire industry. So far, three entities have been granted a license: Yapeal, a neobanking startup; Klarpay, a merchant payments company; and Mogli, an e-wallet provider.
Featured image credit: Unsplash
