There are dozens of local — or ‘regional’ — banks in Switzerland. How are they different from the ‘national’ banks?
Even though Credit Suisse is now out of the picture, there are still hundreds of banks thriving in Switzerland.
They include major financial institutions with country-wide presence like UBS of course, but also Postfinance, Migros Bank, and Bank Cler (formerly Coop Bank).
There are also approximately 90 private banks, which offer customised financial services tailored specifically for high-net-worth individuals.
Then, there is a a cooperative bank like Raiffeisen; in addition to 24 cantonal banks (only Appenzell Ausserrhoden and Solothurn don’t have one of their own).
Aside from the traditional brick-and-mortar banks, there is also a new generation of online ‘neobanks’:
READ ALSO: Is it worth opening an online ‘neobank’ in Switzerland?
Last but certainly not least, there are also 59 regional banks across Switzerland.
What are they?
According to Moneyland consumer platform, they are savings banks that concentrate their banking activities on one or several municipalities or cantons, and focus primarily on savings and mortgages.
However, some also offer other loans — both personal and business — along with stockbroker services, as well as credit and debit cards.
“Banks in this category may be corporations or cooperatives. Some of these banks cooperate with each other under umbrella groups, such as Clientis and Entris,” Moneyland said.
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Can you benefit from using regional rather than national banks?
It really depends on what you are looking for in a bank — what kind of services are most important to you.
“Regional banks often have a founded knowledge of the local real estate markets and business environment in the regions they serve,” Moneyland noted. “This can translate into more of a case-by-case approach for services like mortgages and business loans, rather than standardised processes.”
But that’s not all.
Some of these banks offer more favourable interest rates than the market standard, and may have specialised products that are not available from most large banks.
“They also pay interest on the balances of private accounts, which is uncommon in Switzerland.”
Another advantage, especially for those who live in rural or less populated areas, is that regional banks often have branch offices in smaller communities that are not served by larger banks.
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What about the disadvantages?
One example is the relatively limited scope of services they offer, when compared with cantonal or national banks.
For instance, many don’t offer Twint, but their own versions instead.
(However, if you have an account at a regional bank that does not have its own Twint app, you can still use Twint by linking your private account to the neutral prepaid version of Twint.)
Also, as the Moneyland pointed out, these banks have regional limitations.
“Some only accept customers who live in the region they serve. But even banks that accept clients from outside their region may limit the geographical scope of certain services — for example, mortgages might be limited to properties in a specific region.”
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Is your money protected in these banks?
Yes, regional banks are, as all other banks in the country, subject to strict regulations by the Swiss Financial Market Supervisory Authority (FINMA).
As an additional safety measure, “Swiss law demands capital adequacy standards” to ensure solvency, according to Swiss Banking Association, an umbrella group encompassing 260 banks and other financial service providers in Switzerland. “Swiss banks can therefore be counted among the safest in the world.”
As an additional protection against losses, all financial institutions in the country must be members of the deposit insurance scheme, esisuisse, which takes effect in case a bank nevertheless becomes insolvent.
READ ALSO: How safe is your money in a Swiss bank?
