Market analysis on Open Banking in Switzerland

2. September 2021 | Zürich | Von Dr. Daniela Massaro

We are living in an increasingly digital world. Various aspects of our lives are brought into the virtual sphere, creating an ever-expanding amount of data that can be leveraged by market actors to boost innovation. This trend is deeply impacting a multitude of industries, shaping the relationships between consumers, companies, and governments. When it comes to the financial industry, Open Banking is one of the most discussed topics, since it has the potential to fundamentally transform the way consumers manage their finances by sharing their personal financial data with other financial service providers and to allow consumers more choice of how they bank and pay.

Two-part analysis on Open Banking in Switzerland

Mastercard has conducted an in-depth market study in Switzerland to understand where Open Banking development stands, what the views of market actors and consumers are, and whether monetization opportunities are likely to arise.

This is the first of a two-part study in which we aim to analyze the current market landscape of Open Banking in Switzerland. In this first part, our goal is to provide the overall context to the topic, and it will be more relevant to the audience less familiar either with Open Banking or the Swiss market. In the second part, we offer a deeper analysis into business considerations for market actors as well as opportunities that may arise from relevant Open-Banking-enabled services in the Swiss market.

Focusing on retail applications, this study was built upon three main pillars. Firstly, a quantitative study was designed to assess Swiss consumers’ attitudes towards Open Banking across a diverse set of topics, such as digital and banking affinity, interest for Open-Banking-enabled services, willingness to pay and security concerns. Secondly, a series of interviews with different key actors in the Swiss financial market landscape were conducted to capture their thoughts and attitudes towards Open Banking, including incumbent financial institutions, solution providers and other participants. Finally, Mastercard’s international market knowledge was leveraged across countries where Open Banking is more established, to place Switzerland in the right context of global Open Banking development.

Joining these pillars together, we seek to provide a clear understanding of the Swiss Open Banking market, with one caveat – due to the nature of the analysis on the consumer dimension, we focus on private consumers, leaving the corporate segment out of scope for the time being.

Open Banking as a success factor
The study concludes that Switzerland presents a favourable environment to the development of Open-Banking-enabled services. In Switzerland, the establishment of an Open Banking ecosystem is well underway through its industrydriven approach, although arguably at earlier stages than in the surrounding regulatory-driven European Union. Still, few doubt that Open Banking-enabled services will inevitably take hold in most, if not all, aspects of our financial lives. The foundation is laid for our Swiss financial institutions to drive this development further.

Already today, many market participants are proactively working together to drive the necessary standardization that will allow solutions to scale in an industry-driven approach. The study also shows that a significant proportion of Swiss consumers are not yet familiar with Open Banking in general, but are interested, open and even willing to pay for Open Banking-enabled services if they are explained. Therefore, as awareness for such services increases in the market and consumers are able to recognize their value in everyday life to a larger degree, demand is expected to materialize. In fact, many indicated their willingness to change their primary bank or add a banking relationship to benefit from Open-Banking-enabled services, once available. Hence, while demand for services focused on corporate and wealth use cases is more tangible today and has driven their currently more advanced development, the extension into the retail space is ultimately considered an inevitability.

With these findings, Open Banking is likely to become a key lever to enable Swiss financial institutions to further expand their market reach both through new customers and new partnerships, unlocking revenue streams via the application of innovative business models.