Open Finance opening up opportunities for the financial centre

Swiss financial centre a hive of innovation

The banks in Switzerland employ innovative services to meet the needs of private customers. In recent years, for example, TWINT has established itself as a simple and valuable solution for online, point-of-sale and peer-to-peer payments. Hardly any other European country can boast such a successful and broadly accepted payment app. Switzerland’s innovative eBill system, meanwhile, offers a secure and convenient way of paying digital bills from any account.

Standardisation and opening of interfaces addressed

In this context, open finance represents the next step towards developing the current offering and continuing to provide straightforward, secure and – above all – innovative and internationally competitive financial services. The SBA and its member institutions see huge opportunities in opening up interfaces and cooperating with third-party providers. With this in mind, the SBA welcomes in principle the open finance goals published today by the Federal Council, which were drafted by the Federal Department of Finance (FDF). Many points have already been addressed, and the SBA will continue to work towards achieving these goals together with its members.

Back in 2020, the SBA published a position paper setting out the case for market-based implementation of open finance in Switzerland. This would help the most marketable business models, i.e. those that customers actually want, to prevail.

To facilitate standardisation of the necessary technical infrastructure, the SBA published clear guidance last year in conjunction with Swiss Fintech Innovations (SFTI) on standardising interfaces and drafting the relevant technical principles. New specifications are continually being worked out and published on the basis of selected use cases, including payments, mortgages and portfolio management.

Groundwork for scalable third-party access already done

Any framework for sharing data must be founded on mutual trust. This is especially true in open finance, where third parties benefit from simplified access to customers’ personal and banking data. Protecting customer data is a top priority both for the banks and in supervisory law.

It should be a top priority in open finance as well. The University of Applied Sciences and Arts Northwestern Switzerland (FHNW) published a study in December 2022 explaining which rights and obligations can arise from various models for collaboration between banks and third-party providers. This clarifies important points and helps to build mutual trust regarding the controlling duties and rights on both sides.

Regulatory intervention unnecessary and ineffective

The SBA continues to believe that state regulation in this area is highly unlikely to have the desired effect. Government intervention would stifle the progress made on the market to date and distort competition. Customer needs should continue to dictate how open banking is implemented in Switzerland going forward.