Switzerland is slightly behind the rest of Europe and certainly the UK when it comes to creating an open banking ecosystem. This is well accepted and is partly to do with the secrecy and privacy that is so entrenched within the industry that banks are very culturally reluctant and mistrusting of others and so find it hard to engage and collaborate.

It is also due to Switzerland lying outside of the EU and so not having adopted PSD2. Not being mandated to do something invariably slows a process down even if it is a good idea.

But all is not lost, says Rishi Chattopadhyay, Founder and CEO at SwissWealthTech. “Although the framework for open banking is not there yet, there is a strong and thriving FinTech community striving to engage with the industry and we are starting to see progress.”

He thinks that the Swiss banking industry can learn from the UK market and benefit from several FinTechs that have collaborated with banks in the European market and are now seeking to scale up and enter the Swiss market. “If there is previous experience of a FinTech successfully working with the banks, then that ups comfort levels here,” he says.

Sandbox or incubator type schemes also lend themselves to adding comfort and trust, he thinks.

But, he says, real progress will be made only when collaboration and cooperation become something that is advantageous and essential for future innovation. This is the turnkey for change. “Banks will eventually be persuaded by the advantages of reaching out once they realize that they need the customer centric value adds at the front end.”

Indeed, the area where the client is directly impacted and where the bank can add value will be the area where FinTech will be able to gain traction. “Onboarding. AML, KYC and suitability are all ripe for a decent digitized proposition. Anything that helps banks to deliver an enhanced customer experience, sustainable offerings and enhance anything that is directly client facing will be popular as banks realize there is a pressing business need for it,” he says.

He adds that a front end that allows clients to customise and shape the way that they see their holdings and are able to slice and dice their own data to provide a consolidated view or to adjust risk or other elements will be popular. “This is all about serving the needs of clients and with the younger generation coming into or creating wealth then their expectation of what they want as standard will also consider the latest and newest technology,” he says.

“This is the area where the ecosystem comes into play with a system being able to offer those ancillary services and products – both relevant to the holdings and also more in a general lifestyle way. It about trying to create the solutions for future problems,” he says.

However, he warns that this will not be done overnight and that it’s very important the get the foundations for the ecosystem right in the first place. “The key to this will be the cultural change so that banks will engage with the FinTechs to get this element right- once that happens then the banks will have a hard think about what adds value for their customers’ financial health and wellbeing and the ecosystem will develop accordingly,” he concludes.

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This article originally appeared in The Wealth Mosaic's 2020 Swiss Wealth Technology Landscape Report. Click here to access and download this report:
https://docsend.com/view/2b56ksz