Digital Banks - Switzerland

Switzerland

In Switzerland, the Digital Banks market market is anticipated to witness a substantial growth in Net Interest Income, with a projected value of US$9.81bn by 2024.
The subsequent years are expected to exhibit a steady annual growth rate (CAGR 2024-2028) of 11.27%, leading to a market volume of US$15.04bn by 2028.
It is worth noting that in China will dominate the global landscape, generating the highest Net Interest Income of US$969,200.0m in 2024.
Switzerland's digital banking market is thriving with the rise of innovative fintech solutions and the strong demand for secure and efficient online banking services.

Key regions: United Kingdom, Japan, China, United States, Brazil

Definition:

Digital Banks refer to the emerging market for purely digital banks that offer financial services via online and mobile platforms. Unlike traditional banks, digital banks also known as neobanks, do not have store-based branches and instead rely on technology to deliver their services. But in contrast to digital-only direct banks, which focus on providing traditional banking services in an online format, the digital banks/neobanks covered in this analysis prioritize cutting-edge features and a modern user experience.
Digital Banks offer a wide range of financial products and services, including savings and checking accounts, credit cards, personal loans, and investment products, among others. They aim to provide a more convenient, accessible, and user-friendly banking experience by leveraging technology such as mobile apps and artificial intelligence. They also provide a digital identification and onboarding process, often via smartphone.
The Digital Banks market is growing rapidly as consumers increasingly demand more convenient, digitally focused financial services. Neobanks/Digital Banks are able to offer these services at a lower cost compared to traditional banks, as they have lower overhead costs and a more efficient operating model.
However, digital banks face challenges in building trust and establishing their reputation in the financial services industry. They must also navigate the complex regulatory landscape and comply with the same rules and standards as traditional banks.
Overall, the Digital Banks market represents a growing and exciting opportunity for financial services providers to deliver innovative and convenient solutions to consumers.

Structure:

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income as well as the number of ATMs.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the retail and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Bunq, Tomorrow, and Revolut.

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Analyst Opinion

The Digital Banks market in Switzerland has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Switzerland are increasingly turning to digital banks due to the convenience and efficiency they offer. The younger generation, in particular, is more inclined towards digital banking services, as they are tech-savvy and value the flexibility and accessibility provided by online platforms.

Trends in the market: One notable trend in the Swiss digital banking market is the rise of neobanks, which are fully digital and operate without any physical branches. These neobanks are gaining popularity among customers for their user-friendly interfaces, competitive fees, and innovative features. Additionally, traditional banks in Switzerland are also investing heavily in digital transformation to stay competitive in the evolving market.

Local special circumstances: Switzerland's reputation as a global financial hub has contributed to the growth of the digital banking sector in the country. The Swiss population has a high level of trust in financial institutions, which has paved the way for the adoption of digital banking services. Moreover, the country's strong regulatory framework and stable economy have created a favorable environment for digital banks to thrive.

Underlying macroeconomic factors: The increasing digitization of the Swiss economy, coupled with the growing demand for online banking services, has fueled the expansion of the digital banks market in Switzerland. Furthermore, the COVID-19 pandemic has accelerated the shift towards digital channels, as more customers are opting for contactless and remote banking solutions. Overall, the combination of technological advancements, changing customer preferences, and supportive market conditions is driving the growth of the digital banks market in Switzerland.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.