Switzerland’s banking space is shrinking. There are third fewer banks now than there were at the start of the millennium.

Still, the country famous for its banks does have a high amount of bank branches per capita. Right above Japan, but under Italy. At 37 branches per 100,000, Switzerland is much higher than the world average (10.8) and the EU average (20.9).

The customers, however, don’t rely on branches anymore to do their banking. The world and Switzerland are transforming to digital banking.

In fact, 77% of Swiss residents are already using internet banking. That’s almost 20% more than the EU average.

Mobile banking, on the other hand, seems to be less popular. In 2019, only 43% of the adult population used mobile banking via smartphone at least once a month. Though, the figure is probably higher now after the pandemic.

The trend is definitely going upwards, but on the other hand, that isn’t reflected by the number of fintech-based digital banks in the country. The incumbents still have the upper hand with their online and mobile banking apps.

It is telling that the most popular neobank in the country is Revolut. A UK-based challenger bank popular across Europe.

What’s interesting is that the fintech company doesn’t even offer a personal Swiss bank account and cannot be used when a personal account is required to receive or make payments.

It seems that the Swiss regulators have woken up to the fact that fintech digital banks are a thing and have started awarding fintech banking licenses in 2019, with the first license being granted only in 2020 to Yapeal.

The Swiss financial regulator (FINMA) has also awarded licenses to two new crypto banks – SEBA and Sygnum.

Let’s jump in and see firsthand what digital banks are present in Switzerland at the moment.

Alpian

Alpian is a mobile-first digital wealth management app. More notably, it’s Switzerland’s first digital private bank. The fintech company got FINMA’s digital banking license in March 2022.

The company is focusing on clients with 100,000+ CHF in savings that are willing to avail of advisors via digital channels versus going into a physical branch for advice.

Switzerland, although not very big, is a very affluent market, and for this reason, there are many potential clients for this type of digital bank that isn’t targeting the mass population.

So, what exactly does Alpian offer to its clientele? First of all, you’re getting accounts in four currencies (CHF, GBP, EUR, USD) and accompanying virtual and metal Visa debit cards.

You’ll only get one IBAN for all four accounts, which may or may not be a good thing for you. The company promises competitive exchange rates and easy deposits and withdrawals from each of the four accounts.

Investment-wise, there are two types of accounts – Managed by Alpian and Guided by Alpian.

If you choose Managed by Alpian, their team will take full responsibility for growing your wealth. It’s a hands-off approach for you as you watch your wealth grow on autopilot. The company offers a diversified portfolio after screening thousands of investment opportunities.

On the other hand, Guided investing means that the app will analyze your lifestyle and recommend a portfolio “built from a curated list of funds offered by industry leaders.” What you get in the end is a portfolio mirroring your social and environmental impact choices.

Finally, the company is offering a team of experts always at your disposal through chat or even video calls.

Klarpay

After Switzerland’s first private digital bank, we have the first Swiss-based fintech to offer borderless multi-currency accounts to digital businesses – Klarpay.

It’s primarily focused on several types of online businesses:

Online merchants
Marketplaces
Affiliate networks
Marketers, Affiliates, and Social Media Influencers

Each of these businesses can avail of laser-focused benefits for their companies that no traditional bank can offer.

For instance, online merchants will appreciate seamless integration, the ability to accept 169+ local payment options globally, as well as an all-in-one dashboard letting them simplify money movements for their entire e-commerce activity.

Online marketplaces can accept and pay out funds through hundreds of local methods plus create payment accounts for users and thus allowing them to accept payments and payout directly from their Swiss IBAN accounts.

Affiliate networks enjoy hassle-free affiliate payments in their preferred way, from bank transfers to alternative payment options, without outrageous fees. All you have to do is initially set up the affiliate payout list and make payouts with a single click or via API.

And lastly, marketers, influencers, and affiliates can expedite payments from networks, merchants, and platforms directly to their Swiss IBAN accounts in the currency of their choice.

N26

Next up, we have a German bank with a full German banking license, N26. This bank is offering digital bank accounts all over Europe and is a well-known and recognized neobank.

In Switzerland, they are offering an euro bank account with German IBAN. There are two types of personal and two types of business accounts.

N26 Standard is free and offers a virtual debit card accepted worldwide, free and unlimited payments in any currency, 3 free ATM withdrawals in euros per month, analytics and budgeting features, up to €100,000 deposit protection, and more.

The N26 Smart account costs €4.90 per month and offers up to 5 free ATM withdrawals, a colorful debit card, optional extra card, up to 10 sub-accounts, round-ups, premium partner offers, phone support, and much more.

Neon

Neon is a Swiss-based fintech and digital bank offering fee-free banking account in addition to paid plans. Because Neon isn’t a bank but a fintech, the bank account is maintained by the Hypothekarbank Lenzburg, a fully-licensed Swiss bank.

Unlike N26 and Revolut, with Neon, you get a unique Swiss bank account number. What separates Neon from traditional Swiss banks are its more affordable exchange rates and no to low fee accounts.

Although Neon was launched in 2019, they already attracted more than 100,000 customers.

The three accounts Neon offers are:

Neon Free
Neon Green (5 CHF/m)
Neon Metal (15 CHF/m)

With the free account, you get a virtual card and have to pay for a plastic card (10 CHF) if you want one. Otherwise, you can add the virtual card to Apple or Google Pay and use it with your phone.

The most interesting account is definitely the metal. Neon metal costs 15 CHF per month and gets you a 22-gram metal debit card. With this card, you get free worldwide ATM withdrawals and up to five free cash withdrawals in Switzerland per month.

Curiously, it’s the first metal card in Switzerland, obviously drawing inspiration from Revolut and others. However, the company was also obviously inspired by bunq because for every 100 CHF that you spend with the metal card, the company will plant a tree in an effort to offset CO2.

Neon has a lot going for it and can bring some real benefits to its users. It’s no wonder that Forbes named Neon the best bank in Switzerland for 2022.

Revolut

Revolut is one of the best-known digital banks, not only in Europe but worldwide. With 18 million personal and 500,000+ business customers, it’s one tough cookie for traditional banks.

In Switzerland, it’s estimated that well more than 200,000 people have a Revolut account. That’s in spite of the fact that Revolut didn’t offer a Swiss IBAN until recently.

Until this year, you would have to transfer money to the UK IBAN available with your account and pay a fee to transfer the funds, even if they were in CHF.

You see, when you open a Revolut account from Switzerland, you get a euro account with a Lithuanian IBAN and a GBP account with a GB IBAN.

Now, you can finally transfer money to your Revolut account via a general Swiss IBAN. No more paying fees for topping up the account and card.

But what is the appeal of Revolut? For me, it’s the budgeting and analytics capabilities my traditional banking app doesn’t have. For others, it’s the easy-to-use and intuitive app as well as fair currency exchange rates.

There are also real-time transaction alerts many banks were missing up until very recently. Investing in cryptocurrency, stocks, and commodities is also a big reason for some. Although, these aren’t available here yet.

SEBA Bank

SEBA Bank is one of two crypto banks on the Swiss market that were awarded the FINMA license. Switzerland is playing a pioneering role because this is the first time such licenses have been granted worldwide.

SEBA Bank offers convenient and seamless fiat and digital asset payments, transfers, and card services and supports individual, corporate and institutional clients.

Its digital banking service includes Fiat accounts in CHF, EUR, USD, GBP, HKD, SGD, PLN, and JPY.

There are also Crypto wallets for BTC, ETH, DOT, SOL, AVAX, LTC, XTZ, ADA, XLM, USDC, BCH, SNX, UNI, YFI, LINK, and AAVE.

Is there a difference between a normal bank account and a crypto bank account? A crypto account is, in fact, very similar to a cash bank account with a traditional or digital bank.

You have full control over the account via eBanking, and can initiate transactions or receive funds from personal wallets, banks or exchanges.

Sygnum

Sygnum has both a Swiss banking license and a Singapore asset management license.

The clients of this banking pioneer can use their deposited CHF, EUR, SGD, and USD to securely buy, trade, and hold Bitcoin, Ethereum, XRP, and a Digital CHF token in one account.

The company offers a wide range of services, including a convenient and cost-effective credit line using crypto as collateral, accounts, custody, and staking, brokerage, tokenization (unique investment opportunities for investors or raising capital more effectively for issuers), B2B banking services, and more.

Wise

Wise is another UK-based neobank that’s operating on the Swiss market. The fintech company offers a multi-currency account and a Visa debit card, and most importantly, low-cost international transfers.

With a Wise multi-currency account, you get 10 local account details. Unfortunately, a Swiss IBAN account isn’t one of them. On the other side, you can hold and convert money in 53 currencies, Swiss franc included.

The Wise debit card supports spending money worldwide with low conversion fees and zero transaction fees. It’s currently available for multi-currency account-holder residents in Australia, EEA, the UK, the US, Japan, New Zealand, Singapore, Malaysia, and Switzerland.

Your funds are safeguarded in a separate bank account in a reputable bank and not covered by the protection schemes that you would get with a bank account. However, in the event that Wise goes bankrupt, the money will be returned to you, regardless.

Yapeal

Yapeal is the first fintech to get a banking license in Switzerland. The company offers quick account opening with no paperwork, as well as no hidden fees.

As is the case with other digital banks run by fintechs, they hold no money. All the users’ funds are kept in a reputable bank. In this case, it’s the Swiss National Bank.

All the deposits are solely used for what they were intended and are covered by the Swiss deposit protection scheme.

There are three adult account types and one for kids 7+ years old. The free Loyalty account is very limited in what it’s offering. For instance, you can get a debit card and a personalized IBAN, but you can’t make domestic payments, ISR, QR Bill, or eBills.

The Private account costs CHF 4.90/m and offers a free debit card as well as all sorts of payment and money transfer options as well as foreign payments without FX rate surcharge. However, you still have to pay for cash withdrawals.

Lastly, the Private+ account (CHF 8.90/m) offers all the features and has free domestic and international withdrawals.

Yapini is a digital account for children and young people from the age of 7. With this account, kids receive a Visa debit card, including mobile payments, and a way for their parents or guardians to keep track of their children’s finances.

The company also offers 3a pension savings and investing. You can make single payments or standing orders and track your pension funds directly from your account.

Banks with mobile banking apps in Switzerland

Many traditional Swiss banks offer mobile banking apps that are very popular. These include:

Zak by Bank Cler
CSX by Credit Suisse
UBS
Raiffeisen (Co-operative bank)
Migros Bank AG
Yuh by PostFinance

Apart from offering online and mobile banking for their main bank accounts, some incumbents opted for opening a separate digital banks.

Credit Suisse launched its digital bank called CSX and won over 100,000 users in its first year. Half of them younger than 34.

CSX is much cheaper than Credit Suisse bank accounts and can even be free if used correctly.

Bank Cler launched its digital bank Zak in 2018. Like most other digital bank accounts, it’s free and can only be used from an app on your smartphone.

It’s a great alternative to Revolut as it is a bank account offered by a Swiss bank and has free payments and transactions abroad.

However, Zak has a drawback that might turn off expats in the country. It isn’t available in English. The “only” languages available are Italian, French, and German. Why they didn’t include English is a mystery.

Advantages of Digital Banking

Digital banking has many advantages over conventional banking. It naturally has some flaws as well. However, there is a distinction between digital banks, usually implemented by fintech companies, from online or mobile banking that brick-and-mortar banks are offering to their userbase.

Digital banks offer low fees, or none at all especially for day to day banking. This is very much unlike standard banks that demand monthly and transfer fees and charge you for other essential banking services.

Conventional banks have a lot of overhead. Office and branch space, thousands of employees and legacy systems that are expensive to maintain, all cost a lot of money.

Neobanks have almost none of that and can manage not charging the monthly fee and offer much better savings interest rates. Coupled with free international transactions, it’s often enough to attract new customers in droves.

For digital banks, main source of income are the interchange fees. They don’t charge these tiny fees to their customers but to retailers and merchants. By setting up the system like that, users don’t have to pay for transactions, and the bank earns money from these tiny transaction fees nonetheless.

As already mentioned, another benefit to customers is that money transfers are generally free and instant between users but often also between other banks.

International transfers also have a modest FX rate that is much cheaper than with traditional banks and even some money transfer services like Western Union, and especially PayPal which are known for their terrible exchange rates.

READ NEXT: The 23 Best EU Digital Banks

Conclusion

Although banks are one of the things Switzerland is famous for, the market as a whole is slowly transitioning into digital banking.

With only a handful local digital banks and only a couple of international neobanks entering the Swiss banking space, the transformation is taking its time.

Challenger banks are also facing fierce competition from incumbents’ mobile banking apps.

However, the fact that Revolut managed to snag a couple of hundred thousand customers with its subpar product (no personal Swiss IBAN!) means that the people are looking for an alternative to traditional banks.

For digital banks worldwide, getting people to signup for their apps is fairly easy. What’s hard is getting them to use their digital banking accounts as their main banking account.

It will be even harder to do so in Switzerland as its affluent people might not want to transfer their wealth over to the new players.

This is where incumbents have an advantage with their digital banks. For example, Credit Suisse’s CSX saw around half of its clients using it as their salary account or primary bank account.

Naturally, trust in traditional banks is much higher than in fintech companies that are less than five years old and mostly unknown.

Digital Banking in Switzerland 2023 (Transformation Takes Time)