Swiss banks do not anticipate a change in the trend and continue to display great confidence in the property market: only 21% expect an increasing need for impairment losses on residential mortgages (last year: 31%). Confidence in the resilience of Swiss SMEs is also up substantially, with only 42% seeing loan defaults rising over the next few years, a figure 17 percentage points lower than last year.
The impact of the acquisition of Credit Suisse by UBS
The emergency takeover of Credit Suisse by UBS was an important factor in stabilising the financial markets and restoring confidence in the Swiss financial centre, but brings challenges too. For instance, concerns have been voiced that a gap in the offering could open up in the corporate client business in particular if credit becomes tight. There is no reason to expect this in the short term. However, the majority (66%) of banks surveyed believe that adjustments to the offering in the corporate client business are definitely possible in the medium to long term. This would mainly affect medium-sized companies without direct access to the international capital market.
In addition, Swiss banks expect financial market regulation to tighten, particularly in terms of liquidity and capital adequacy requirements (62% and 40%, respectively), as well as more supervisory activity by FINMA (67%). However, the extent to which confidence can actually be regulated on a lasting basis in this way remains to be seen.
Artificial intelligence advances
Artificial intelligence (AI) is becoming increasingly important in the Swiss financial sector; 82% of banks say they are engaging with the issue. Although the majority of banks said that it was limited to general discussions for the time being, it is striking that one-third (32%) have developed initial applications or already conducted pilot projects. However, only 6% already use AI applications operationally. Banks primarily see such applications in regulatory and compliance (54%), as well as in process automation (55%), and hence more in the back office than in interaction with customers – only 20% of banks are currently considering applications in customer and investment advice.