Swiss banks fall further behind in the global digitalization race

The latest Digital Banking Maturity Study by Deloitte uses a mystery shopping method to analyze over 1,000 digital banking functions at 349 banks in 44 countries, including 12 Swiss retail banks with a combined market coverage of over 80 percent. The Swiss banks have fallen further behind in recent years: four years ago in 18th place, two years ago in 21st place and now only in 27th place.

In the first study in 2018, Switzerland still made it into the top 5. While other markets have expanded their digital offerings with mobile-first strategies, AI-supported customer interaction and innovative embedded financial services, Swiss banks have fallen further and further behind over the years.

Digital onboarding cumbersome

At least there has been progress in digital account onboarding. All but one of the Swiss banks surveyed now offer digital account opening. However, waiting times of several hours or days are not uncommon in Switzerland. International digital banks enable account openings with AI-supported real-time checks in seconds - similar to Apple Pay or Google Pay. In Switzerland, on the other hand, a video call or even a visit to a branch is often required.

"Swiss banks have made small advances in digital account opening, but compared to foreign banks, the process is still comparatively complicated and slow. In countries like the UK, a selfie and an ID scan are enough for AI verification and account opening," explains Cyrill Kiefer, Banking Consulting Lead at Deloitte Switzerland.

Weak customer interaction

The smartphone is establishing itself as the primary access channel for banking transactions, especially abroad. One example of this is real-time notifications of expenses. However, only around a third of Swiss banks offer this function. The difference is even greater when it comes to intelligent savings functions. Only a few Swiss banks use AI-supported algorithms to adapt savings plans to individual spending behavior. This automation works like personalized music recommendations from streaming services based on usage behavior.

Swiss mobile banking apps also often lack basic functions that promote interaction and customer loyalty. Interactive dashboards, personalizable budgeting tools or real-time financial analyses are virtually non-existent. While digital pioneers use AI for automatic categorization and savings tips, customers of Swiss banks often have to manage their spending manually or resort to external apps. "The true value of digital banking lies not in the number of functions that are packed into an app, but in how well they meet customers' needs at the right moment," Cyrill Kiefer is convinced.

Value-added services ignored

 Leading digital banks are two and a half times more likely to offer value-added services such as public transport tickets, streaming subscriptions and financial management tools. Swiss banks are not exploiting this potential. The lag in embedded insurance services is particularly striking: Only one Swiss bank surveyed comprehensively integrates such solutions. Swiss banks are also lagging behind when it comes to automating administrative tasks: tax settlements, in-app asset management and one-click bill payments have long been standard in many global markets.

While digital pioneers implement innovations quickly, regulations and a conservative strategy are slowing down Swiss banks. They also usually lack a clear mobile-first strategy. In addition, digital pioneers use apps as a central interface, whereas Swiss apps often remain merely e-banking extensions. Instead of investing in intuitive interfaces and personalization, many banks simply focus on additional features - resulting in confusing and less user-friendly apps.

Banks award growth potential

But it is not only customer loyalty that is at risk. Important new sources of revenue also remain untapped. Digital pioneers are increasing their revenue per user through intelligent cross-selling or embedded financial products. The lack of integrated insurance, investment products and lifestyle services is a key reason why Swiss banks are missing out on growth potential compared to foreign digital champions.

"Banks must evolve from pure payment and account management providers into digital service platforms. Financial management, modern direct payment systems, subscription management, booking systems and mobility solutions must be seamlessly integrated in order to become digital everyday companions. Those who do not help shape this change risk losing an entire generation of customers," says Cyrill Kiefer.

Further information on the study