About the study
Hello Mr. Benz, how did this study come about?
I studied geopolitics many years ago and have always followed this topic. In personal discussions with its members, the SBA found that the changing geopolitical landscape is a top priority, especially for internationally operating financial institutions. Until now, however, the effects of geopolitical changes on the banking center have not been scientifically investigated. This study is the first to fill that knowledge gap.
What is the main objective of the study?
The main objective of the study is to analyze the impact of geopolitical risks on the Swiss financial center and individual business models. Key risk factors such as international tensions, sanctions and cyber threats are identified and evaluated in order to assess the long-term stability and competitiveness of the Swiss banking system.
What methodology was used for the analysis?
The study is based on a three-phase methodology that combines AI-supported literature analysis with 130 relevant publications and qualitative interviews with 22 senior bankers and experts. This data was deepened in expert assessments and dynamic simulations to understand the impact of geopolitical risks on various business models.
Core statements of the study
What are the studyโs conclusions?
Geopolitical risks are part of the new reality. The Swiss financial center needs to adapt accordingly if it wants to maintain its leading position in the future.
Three core statements were derived:
- The main risk factor for banks in Switzerland is how they deal with sanctions. The country needs to take a proactive approach to this issue. Politicians must find an intelligent way to shape their sanctions policy so that Switzerland can continue to play its role as a reliable safe haven.
- Active risk management is needed to prepare policymakers and banks for different geopolitical scenarios.
- A consistently high level of adaptability is required to identify and seize opportunities in a challenging environment. Here we see innovation and digitalization at the forefront, for instance the use of AI as a new technology.
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Importance of foreign markets for Switzerland
How important are foreign markets for Switzerland?
Very important โ in Switzerland, CHFย 2,600ย billion of foreign customer assets are managed by the banking center. Foreign customers account for 45% of the assets held at Swiss banks. CHFย 19.4ย billion of all revenues in Switzerland are generated from cross-border wealth management. Foreign markets are therefore important for the industry, and the competition never sleeps. Switzerland is competing with leading international financial centers, which are gaining market share and thus challenging our leading position in cross-border wealth management.
How can banks deal with geopolitical risks?
Banks are affected to varying degrees by geopolitical risks. Domestic wealth management and retail banking may benefit, while internationally operating business areas such as corporate banking or asset management may feel the uncertainty, for example, in the form of revenue losses. A geopolitical risk framework with scenario analyses can help banks recognize complex correlations more easily and respond to them in a targeted manner.
What is your final conclusion?
That varies from bank to bank. However, the past has shown that the Swiss financial center can adapt quickly to new challenges. Thanks to their flexibility and innovative strength, the countryโs banks have largely maintained their stability. In the current environment and in view of an ever-changing world order, this ability to adapt is a decisive success factor for long-term competitiveness. To safeguard this, banksย โ but also the government and the authoritiesย โ need active and comprehensive risk management.
Dr. Benz, thank you for the interview!
