Private Banking Study 2021 – Switzerland [English edition]
For the fifth time, zeb has analyzed the Swiss private banking market – and it’s gigantic. At the end of 2019, Swiss banks held CHF 7.9 trillion in assets under management. Our study focuses on the CHF 1.4 trillion domestic private assets and CHF 2.3 trillion cross-border private assets within that total, rather than assets belonging to companies and institutional customers, which are driven by somewhat different factors.
What’s in it for you?
Despite the current challenges, Switzerland remains the global market leader in cross-border wealth management. With a market share of approximately 25%, the country easily beats its two closest rivals, Hong Kong and Singapore.
Confidence in the competence and experience built up over many decades remains unbroken, and Swiss wealth managers have successfully established a presence in them fast-growing Asian markets. But to retain this pole position, Swiss institutions need to embrace change, boldly entering new territory while continuing to optimize areas where they are already active.
Driven by the rally in equities, assets under management (AuM) at Swiss private banks have grown by almost 6% a year since 2016. At the same time, operating costs have
risen less than operating income, resulting in some 8% annual bottom-line growth. Now, however, the risk of markets turning bearish has increased. Private banks must respond by ensuring efficiency on the cost side, in particular by optimizing workflows with front-to-back automation and digitization – an area where they lag behind other financial services sectors. At the same time, with inheritance volumes skyrocketing it is vital that they improve their relationships with future heirs.
While continuing to make improvements in these areas, private banks must also step boldly into hitherto unfamiliar territory. Although most now offer standard ESG (environmental, social and governance) products, they should aim to become thought leaders in sustainability. Wealth advisors have access to large amounts of data about their clients, but they often fail to use them to unleash revenue potential.
Also, with digital assets (cryptocurrencies and security tokens) forecast to grow strongly through 2024, they must ensure they have a comprehensive digital asset strategy and product offering in place.
In our Private Banking Study Switzerland 2021 we present our key findings and recommendations in detail. In our interview supplement “The future of cross-border private banking” we offer more insights from industry insiders. The interviews were conducted in Q2/2021.