Switzerland: A Banking & Finance Overview
Current Status and Outlook for 2026
Introduction
Swiss banking remains a core part of Switzerland’s economy and its international financial centre. The legal framework aims to safeguard financial stability, protect depositors and investors, and support market integrity.
Swiss banking law is based on a combination of federal legislation, self-regulation and international standards. Federal legislation codifies the fundamental principles, while specific details are set out in Federal Council ordinances. International standards, such as the Basel III framework, the Financial Action Task Force recommendations, and the OECD Common Reporting Standard, are also incorporated into Swiss banking law, either through legislation or through self-regulation.
Key regulators in banking
FINMA, the supervisory authority, oversees banks, securities dealers, and other financial institutions to protect the interests of stakeholders and ensure market functioning. As part of its dual supervisory system, FINMA delegates regulatory audits of financial institutions to recognised audit firms on its behalf.
Key legislation includes the Financial Market Supervision Act, Banking Act (BankA), Financial Market Infrastructure Act and Financial Services Act (FinSA) covering licensing, prudential supervision and market conduct.
In addition to “microprudential” regulation applied at the individual institution level, the Swiss National Bank (SNB) possesses distinct authority over “macroprudential” regulation concerning the entire system. This authority includes the ability to recommend the activation of the countercyclical capital buffer. The SNB mainly concentrates on monetary policy and overall financial stability. In the realm of financial stability, the SNB typically collaborates with FINMA.
Supra-national organisations like the Financial Stability Board and regulatory regimes like Basel III significantly influence Swiss regulations. The EU’s harmonisation efforts, exemplified by MiFID II, also impact Swiss legislation. The recent Berne Financial Services Agreement between Switzerland and the UK further aims to enhance co-operation and market access.
Key regulations
Swiss banks must adhere to strict governance requirements, primarily outlined in the BankA, Banking Ordinance, and FINMA Circular 2017/1, to maintain their banking licences. These standards cover various key aspects including ensuring good reputation and conduct, implementing clear separation of powers between the board of directors and executive management, establishing diversified boards with independent members, and forming audit and risk committees for larger banks. Further requirements encompass setting up independent internal audit functions, ensuring that remuneration systems do not encourage behaviour detrimental to internal controls, regulating outsourcing of functions while retaining key decision-making within the bank, and complying with accounting rule changes mandated by FINMA.
Apart from this, Swiss banks must meet stringent capital requirements to obtain and maintain their licences. These requirements encompass maintaining a minimum share capital, adhering to regulatory capital requirements based on the Basel III Framework, including a minimum required capital and holding capital buffers such as countercyclical buffers to enhance resilience against credit risks and economic fluctuations. Large banks with significant foreign commitments or balance sheets must also maintain an extended countercyclical buffer. FINMA has the authority to require additional capital if minimum requirements and buffers are insufficient to cover specific risks. Banks are also mandated to maintain a minimum leverage ratio based on Tier 1 capital and un-risk-weighted assets. Systemically Important Banks (SIBs) must fulfil additional capital requirements, including going-concern and gone-concern capital requirements, to ensure business continuity and facilitate restructuring if necessary.
The regulations governing banks’ interactions with clients and third parties in Switzerland are primarily rooted in private civil law, particularly the Swiss Code of Obligations (CO) and FinSA. Banks must adhere to principles of good faith and diligence in their dealings, with legal duties and customs further refined through court precedents and standards set by recognised self-regulatory organisations. FinSA ensures client protection, aiming for informed investment decisions and transparent services from knowledgeable professionals. Recognising varying client needs, FinSA tailors its regulations accordingly and deals with inter alia suitability tests, documentation, conflict of interest avoidance, transparency and ombudsman participation. The Anti-Money Laundering Act mandates financial institutions to combat money laundering, including due diligence requirements. Strict sanctions compliance is crucial, with fines up to CHF1 million for violations.
Switzerland’s sanctions regime, led by the Embargo Act, enforces international law, especially in human rights areas, with severe penalties for non-compliance, including asset freezes and service restrictions.
Regulatory developments shaping 2026
The BFSA and UK market access
The Berne Financial Services Agreement (BFSA) forms part of a broader, ongoing dialogue between Switzerland and the United Kingdom on post-Brexit financial services co-operation. It marks a shift away from the temporary and sector-specific arrangements adopted immediately following Brexit, towards a treaty-based framework establishing structured processes for market access across a range of regulated financial services sectors, including insurance, asset management and banking.
The agreement sends a clear policy signal that both jurisdictions intend to facilitate cross-border activity through an outcomes-based approach to regulatory equivalence.
New measures for the “too-big-to-fail” banks and stronger intervention tools
Switzerland’s post–Credit Suisse reform agenda continues to drive significant regulatory and supervisory change. In September 2025, the Federal Department of Finance set out a package of proposed measures aimed at strengthening the Swiss “too-big-to-fail” framework on a cross-segment basis. Key elements include the introduction of a senior managers’ regime concept, designed to enhance clarity of individual accountability within the governance of SIBs as well as other institutions, together with expanded tools to enable earlier and more graduated supervisory intervention.
The reform package also envisages an enhanced intervention capacity for FINMA, including measures intended to take effect more rapidly in stress situations, as well as further work on strengthening FINMA’s sanctioning toolkit. In parallel, the authorities are reviewing aspects of group structures and capital treatment, including through a consultation on proposed changes relating to the capital adequacy treatment of participations in foreign subsidiaries and the associated regulatory parameters. Work on these stability-related reforms is expected to continue in 2026, reflecting an ongoing focus on loss-absorbing capacity and the resolvability of banking groups.
Cyber, outsourcing, and operational concentration move to the top tier of supervisory risks
Operational resilience has emerged as a core regulatory priority, now sitting alongside capital and liquidity in supervisory focus. FINMA’s Risk Monitoring 2025 reports a continued increase in cyber incident reports, and highlights a growing number of attacks targeting third-party service providers. Notably, 47% of reported cyber incidents related to third parties, underscoring the systemic implications of a market in which many institutions rely on the same ICT and cloud service providers.
FINMA further identifies repeated, targeted distributed denial-of-service (DDoS) attacks, which have resulted in time-limited service disruptions. FINMA notes a sharp increase in cyber-enabled fraud involving payment instruments such as TWINT (an electronical payment app) and debit cards. These incidents are likely under-reported. The practical implication for firms is clear: cyber risk management is now viewed as a governance and operational resilience issue, extending well beyond a purely technical or IT function.
Climate and nature-related financial risks move from disclosure toward prudential risk management
FINMA treats climate- and broader nature-related risks as financial risks that translate into established risk categories, including credit, market, insurance, operational, legal and reputational risks. FINMA observes that banks and insurers expect physical risks to increase over time, with transition risks also rising over the next decade.
From a regulatory perspective, FINMA’s Circular 2026/1 on the treatment of nature-related financial risks entered into force on 1 January 2026 and will be implemented on a phased basis. The initial focus is on climate-related financial risks, with the scope expanding to cover all nature-related financial risks by 1 January 2028.
Crypto-assets, custody expectations and new authorisation categories
Crypto-related activities have become increasingly integrated into regulated financial services, encompassing areas such as trading, custody, investment advice, portfolio management and product structuring. FINMA’s Guidance 01/2026, published on 12 January 2026, sets out supervisory expectations relating to the custody of crypto-based assets.
In parallel, on 22 October 2025, the Federal Council launched a consultation on proposed amendments to the Financial Institutions Act aimed at strengthening Switzerland’s framework for fintech and crypto while addressing risks to financial stability, market integrity, and investor and consumer protection. The proposals envisage an upgrade of the existing fintech licence and the introduction of a dedicated regulatory regime for stablecoins and crypto services through the creation of two new authorisation categories: payment instrument institutions and crypto-institutions.
Transparency of legal persons and beneficial ownership information
Enhanced transparency of legal persons and beneficial ownership information represents a further significant development at the intersection of market integrity and anti-money laundering regulation. Switzerland is advancing reforms aimed at strengthening the identification of beneficial owners and establishing a structured framework to ensure that ownership information is kept accurate and up to date. These initiatives are driven by evolving international standards and will affect both corporate governance and compliance processes.
Legislative work is underway through official consultations on a proposed Federal Ordinance on the Transparency of Legal Entities and the Identification of Beneficial Owners. The entry into force of the Federal Act on the Transparency of Legal Entities and the related Ordinance is currently envisaged to take place during 2026.
The regulatory trends emerging for 2026 reflect Switzerland’s ongoing efforts to strengthen financial stability, enhance customer protection, support innovation and maintain alignment with international regulatory standards.