A new survey of 34 banks in Switzerland showed that only about 50 percent of the population bank online, according to a report by Reuters.
The survey was conducted by the Swiss National Bank (SNB) and released on Tuesday (Aug. 27). The survey included questions about things like how much customers actually want the ability to make payments online.
It was focused on digital payments technology, which in Switzerland is more advanced than digitization in mortgage lending.
“Overall, the banks have not yet reached their digitalization targets,” the SNB said.
The survey also showed that there’s increased competition on the horizon for traditional Swiss banks from FinTech firms and online-only banks. These new players are a threat to banks’ margins, the report said.
That ramped-up competition will also bring less loyalty, according to the survey, which found “customers are less likely to maintain a permanent relationship with a single financial institution in the future, and will instead increasingly turn to different intermediaries from the banking and non-banking sectors to find the best service.”
Swiss banks are traditionally known for wealth management, and digital services have barely made an impact in that sector, with less than 1 percent of total assets being digitally managed.
However, this hasn’t stopped investment into the technology. Swiss bank Credit Suisse this week said it plans to invest heavily into its digital ecosystem, and that it doesn’t think it’s necessary to have a large number of branches to compete with other banks.
The bank said it would invest hundreds of millions of francs by the end of 2021. Many banks in Europe have been cutting jobs and closing branches as more and more customers continue to do their banking online.
The move has been helpful to cut the costs associated with traditional brick-and-mortar banks.
“The achievement of long-term success will not depend on having the biggest branch network in the future,” said Thomas Gottstein, head of Credit Suisse’s Swiss Universal Bank (SUB) unit. He did not say anything specific about the closing of branches.