Banks say technology is key to the future
Switzerland’s banks say they face one common key challenge – how to deal with the strategic implications of major technological change.
Swiss bankers at this week’s Finance Forum in Zurich said they could make significant savings if they get their IT systems right.
“Technology is probably the key strategic driver for banks today,” the Forum’s managing director, René Meier, told swissinfo after the two-day conference ended on Wednesday.
“It is a major cost factor for all banks today – probably the largest such factor after personnel – and its importance is absolutely not dependent on the size of the bank.”
Meier said that, while the big international banks were not comparable with regional and cantonal banks in terms of size or complexity of business, issues such as the introduction of standardised central IT platforms would be key for all.
Many modern IT solutions, including some from Swiss companies, can now be adapted by banks for individual needs – a strong buying argument for the country’s major private banks in particular, he added.
Decisive role
Pierin Vincenz, the head of Switzerland’s Raiffeisen banking group, told a panel during the forum’s closing session that IT was important for the future of banking.
“IT will play a decisive role for [all] banks in the next ten years or so, just as it has done in the past,” said Vincenz.
Vincenz, whose group has branches in over 1,200 localities, said the market for specialised IT products was far more transparent now than in the past, which meant customers such as Raiffeisen could now choose between a number of competing solutions.
Hans Vögeli, CEO of the Zurich Cantonal Bank agreed, saying that it was now possible – for the first time – to buy solutions that met the requirements for a standard IT platform.
But Vögeli added that IT was “only one part of the picture”. He said the key challenge for all banks, which could result in major savings, would be to ensure the integration of new IT systems with existing business processes.
Walter Knabenhans, CEO of private bank Julius Bär, told the panel that he believed private banks would also switch to standardised IT platforms over the next five years or so, resulting in significant cost savings.
Optimism
Participants also expressed varying degrees of optimism about the overall prospects for Switzerland’s banking sector.
Vögeli said it was necessary to face the fact that not only the Swiss financial institutions, but also the national economy overall, had lost ground in recent years.
Vincenz added that, in the long run, the success of the Swiss financial centre
would depend on the overall success of the Swiss economy.
Meanwhile, Knabenhans said that Switzerland’s financial centre would grow in absolute terms over the next five years, but that the growth rate would not be enough to avoid further consolidation.
And Swiss National Bank board member Philipp Hildebrandt said the Swiss financial industry would remain important in global terms, but would be dependent on economic developments abroad – particularly in China and the United States.
This is a point of view shared by Adalbert Dürrer, head of public policy at UBS.
“Switzerland has a strong financial centre with good framework conditions, but much will depend on the actions of the new [Bush] administration,” he said.
swissinfo, Chris Lewis
A study by Zurich University’s Swiss Banking Institute concluded that IT accounts for just over five per cent of operating costs for the average Swiss bank.
However figures for individual banks range from 0.03 per cent through to 44 per cent.
With a few major exceptions Swiss banks tend to outsource IT operations – often to other Swiss companies.
The annual Finance Forum brings together experts from the Swiss banking and IT sectors.
Participants identified technological change as the leading strategic driver for Swiss banks – from UBS and Credit Suisse down to regional players.
They predicted that Switzerland would remain a key global player, but could lose ground in comparative terms.
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