Swiss regional and cantonal banks reported historically strong current business conditions but expressed deepening skepticism about long-term prospects and trust in the financial regulator, according to a 2026 industry survey presented at a banking conference in Bern.
The analysis, conducted by schweizeraktien.net, received responses from 31 of 66 CEOs of regional banks, cantonal banks and other regional lenders, representing a 47% response rate. The majority of participating institutions have balance sheets between 500 million and 2.5 billion Swiss francs. Current business conditions at individual banks averaged 8.03 out of 10, the second-highest score since the survey began in 2017 and slightly below the 2023 peak of 8.14. The overall sector outlook improved to 7.29 from 6.96 in 2025.
However, long-term sentiment has deteriorated sharply. Only 9.7% of respondents expect the operating environment for regional and cantonal banks to improve over the next decade, down from 37% a year ago. Pessimists increased to 32.3% from 11.1%, while 58.1% anticipate little change. Confidence in the Swiss Financial Market Supervisory Authority (Finma) fell to 2.94 out of 10, the lowest since 2015 and the second-lowest since the survey began in 2014. The score dropped from 4.21 in 2025 and 5.55 in 2019.
The decline coincides with the August 2026 consultation on a revised 'too-big-to-fail' framework, which, while primarily targeting systemically important banks, includes provisions that could apply to smaller institutions. These include potential fines of up to 10% of a bank's average operating income over the past three years and expanded early intervention powers. Survey authors also cite intensified on-site inspections and demands for additional supervisory powers by Finma Director Stefan Walter as contributing factors.
The Regional Bank Association highlighted concerns over perceived shifts in supervisory approach, noting that direct engagement with supervised entities through frequent on-site visits, additional data requests and increased supervisory communications has raised operational burdens. The association’s managing director, Jürg de Spindler, stated that sentiment was measured before the August 12, 2026 federal proposal, which subsequently eased regulatory burdens on smaller banks, suggesting current sentiment may be less severe than reflected in the survey.
In contrast, satisfaction with the Swiss National Bank’s performance remained stable at 7.65 points, consistent with prior years.
Regulatory pressure and cybersecurity concerns ranked as the top challenges, with scores of 8.81 and 8.84 out of 10, respectively, both record highs. IT investment costs followed at 8.45, while the integration of big data and artificial intelligence rose to 7.03. Competition from non-bank lenders and traditional banks declined to survey lows of 4.13 and 5.58 points, respectively.
Zins margins showed signs of stabilization, with 43.3% of banks expecting further compression over the next three years, down from 66.7% in 2025. Only 16.7% anticipate margin expansion. Expectations for SNB policy rates point to moderate tightening, with 63.3% of respondents predicting rate increases within two years and just 3.3% expecting further cuts.
Client portfolio shifts were evident, with 83.3% of banks reporting increased client demand for equities, up from 59.3% in 2025, and 64.5% noting higher demand for funds and ETFs. Bond demand declined, reported by 60% of respondents, while cryptocurrency interest fell sharply: only 7.1% saw rising demand, while 32.1% reported a decline.
Growth strategies remain focused on established demographics, with 77.4% of banks prioritizing families, 54.8% targeting retirees and 51.6% focusing on small businesses. Generation Z and millennials were a low priority, cited by just 19.4% of institutions. Educational content for youth is limited, with 45.2% of banks offering none and only 3.2% providing a dedicated app.
Personal advisory services continue to dominate, with 80.7% of banks planning to maintain a strong emphasis on human advice over the next three years. No bank offers fully AI-driven advisory, and only 6.5% have integrated AI advisors into their strategies. AI is primarily deployed in back-office functions such as marketing, process optimization and email handling, with Microsoft Copilot widely used or tested and select deployments of ChatGPT or Claude. Data privacy remains a key constraint.
Neobanks lead in trading and payments services, where 76.7% and 73.3% of regional banks, respectively, see them better serving younger clients. However, no regional bank views neobanks as leaders in mortgages or current account lending.
