SBA welcomes Federal Council’s focus on digital finance

The Federal Council’s report on digital finance outlines how the Swiss financial centre’s operating conditions and global appeal can be further optimised against the backdrop of technological developmentes across 12 focus areas. The SBA supports the Federal Council’s stance and welcomes its initiative with regard to enabling change processes, addressing risks, safeguarding the financial centre’s stability, integrity and international competitiveness, and promoting sustainability and international interconnectedness. The SBA further welcomes the Federal Council’s intention to adhere to the proven principles of Swiss financial market regulation: risk- and principle-based, competition- and technology-neutral, proportionate and differentiated.

Cyber security

The Federal Council aims to strengthen the financial market’s cyber resilience and expand the measures to combat cybercrime in the financial sector. The SBA welcomes this priority. A high resilience against cyber attacks is vital to ensuring that the financial centre is trusted and future-proof. The SBA is therefore playing an active role in setting up a crisis organisation for banks and other key financial market participants in order to provide a sound and effective basis for crisis management and information exchange in the event of a major cyber attack.

Use of data in the financial sector

The economic potential of data use in the financial industry is far from exhausted at present. The Federal Council would like to promote a differentiated understanding of data protection and usage in the legislation governing data protection and financial markets. The intention here is to minimise legal uncertainty in connection with the use of data, for example regarding the anonymisation of personal data and the definition of data categories. The SBA welcomes this commitment. Data processing must be trustworthy to ensure that the opportunities offered by digital business models can be better exploited and that customers’ trust in digital processes and services remains high.

Open finance

The Federal Council would like to examine measures to promote and expand the field of open finance in close consultation with the industry . The SBA acknowledges the significant potential open finance offers for the Swiss financial centre and supports the good progress made in the market. It will continue to actively contribute to an environment that enables open finance business models in order to enhance the Swiss financial centre’s competitiveness, in particular by promoting standardised programming interfaces and answering the questions that remain regarding due diligence requirements and liability when working with unregulated institutions. To fully harness the innovation potential in this area, any regulatory initiatives should be holistic and cross-sectoral, so that the financial industry can also benefit from the opening of interfaces in other sectors.

Legal and supervisory framework taking account of new constellations and players

With regard to new players entering the market and disrupting the established structures of the financial industry, the Federal Council would like to consult the industry on the question of whether the existing supervisory perimetershould be expanded or measures such as self-regulation and private certification should be encouraged or mandated. In particular, larger multinational technology companies can create new risks that are not sufficiently covered by the current regulatory regime. The SBA supports a careful analysis of the legal framework with the objective to create a level playing field for all market participants in line with the principle “same risk, same rules”.

Innovation potential

Finally, the Federal Council wishes to bolster the financial sector’s innovation potential by creating a central innovation platform. In principle, the SBA welcomes the prospect of an environment more conducive to innovation and the focus on forward-looking topics in which the Swiss financial centre can potentially differentiate itself from its  competitors. It is vital, however, to make sure that existing innovation networks, platforms and accelerators, as well as the industry associations, continue to be actively involved.

Education system and skills development

The SBA emphasises the importance of ongoing skills development for the Swiss financial centre’s workforce. To this end, the education system must embrace promising new fields like data science, robotics and artificial intelligence at an early stage and provide research funding. International cooperation must also be encouraged. To be among the world leaders, Switzerland must have access to the best talents and experts. Therefore, the SBA welcomes measures to facilitate mobility within the international labour market.

Trustworthy financial market infrastructure

The increasing use of data-driven digital services requires corresponding trustworthy digital basic infrastructures – such as  an electronic identity (e-ID). This remains a high-priority issue, and it is of paramount importance that the process currently envisaged by the administration is completed quickly and successfully. At the same time, innovative business models, particularly in the payment services and digital securities businesses, require stable means of payment as well as a trustworthy and resilient financial market infrastructure. Innovations in this area must be further encouraged by both the authorities and the private sector in order to further strenghten Switzerland’s standing as a business location in the future.

The SBA will maintain its constructive dialogue with the authorities and politics in the relevant focus areas and contribute as early as possible to strategic and long-term issues affecting the future of the financial centre.