The most important players at the Zurich financial centre

The banks are the financial sector’s biggest contributors to value added. They are the centrepiece of Zurich as key players for the economy, for innovation and for cultural life. Their influence stretches far beyond the financial sector, shaping the overall dynamics and appeal of the City of Zurich.

The restructuring of Switzerland’s major banks has led to a shift of value-added shares between banks and other financial service providers. Since 2018, the banks have achieved significantly above-average productivity gains due to stock market performance and customers’ increased trading activities.

Three facts about banks at the Zurich financial centre:

1. They make Zurich attractive – Zurich’s banks are important economic players and contribute significantly as employers, educators, lenders and promoters of cultural institutions to prosperity and to the region’s overall appeal.
2. They provide security and stability – the Zurich financial centre provides ideal conditions for banks by was of stability, high-quality services, an efficient infrastructure, a qualified labour force, a reliable legal framework, an own currency and the competent Swiss Financial Market Supervisory Authority (FINMA).
3. “Weissgeldstrategie” (white money strategy) and privacy protection – the Swiss legal system protects its citizens’ financial privacy from unauthorised access. It sets clear legal boundaries in order to keep away criminals. Switzerland is a leading force in the fight against cross-border financial crime.

Insurance companies in Switzerland are significant employers, important taxpayers and among the biggest domestic and foreign investors. They assume financial risks of companies and individuals by insuring them. In this way, insurance companies are a pivotal driving force for the domestic economy and bear economic responsibility by prioritising their performance and expertise to the benefit of Zurich.

The Swiss insurance market consists of five branches:

1. Life insurance
2. Accident and property insurance
3. Health insurance
4. Reinsurance companies
5. Pension funds
6. Other insurances
7. Captives

Three facts about insurance companies at the Zurich financial centre

1. Largest insurance class – accident and property insurance constitute the largest class of insurance and account for more than half of jobs in the insurance industry, both in the Zurich region and in Switzerland as a whole. With Zurich Insurance, one of the country’s largest property insurers is headquartered in the City of Zurich. (Zurich Financial Centre study, p. 18)
2. Life insurance and reinsurance – are disproportionately well represented at the Zurich financial centre. They include insurance companies based in the City of Zurich that operate internationally, such as Swiss Life or Swiss Re (Zurich Financial Centre study, p. 18)
3. Qualified labour force – proximity to the universities stimulates applied research and innovation, and provides reinsurers with access to highly qualified employees.

1. Stock exchange

Swiss stock exchange – strong worldwide

SIX Swiss Exchange is the leading trading place for Swiss securities, shaping domestic and foreign financial activities. As one of the most important stock exchanges in Switzerland, SIX enables trading with a wide range of financial instruments and is known worldwide for its high liquidity and strong position in the domain of financial market infrastructure. As a reference market for Swiss securities, SIX Swiss Exchange plays a decisive role in the Swiss capital market by facilitating access to capital for companies and promoting their growth. As well as trading, SIX Swiss Exchange offers comprehensive services in the domains of listing, trading and post-trade processing. SIX Swiss Exchange is the leading trading place for Swiss people.

Innovative digital stock exchange SDX

SIX Digital Exchange (SDX) based in Zurich is the world’s first fully regulated stock exchange and central securities depository. Initiated by the SIX Group, the operator of SIX Swiss Exchange, SDX wants to revolutionise the way financial markets operate by providing a seamless and secure platform for traders, broker-dealers, bankers and corporations to explore the world of digital assets. SDX is specialised in the trading of digital assets, such as cryptocurrencies and tokenised assets.

2. Wealth management

Asset managers

Asset managers primarily provide their products and services to institutional clients, such as pension funds, insurance companies, sovereign wealth funds and companies. Furthermore, they manage assets pooled in collective investment schemes, especially investment funds.

Independent wealth managers

The focus is on managing significant private and institutional financial investments from Switzerland and abroad. This involves various risk categories that include equities, bonds, real estate, cryptocurrencies and liquidity. The main goal of wealth managers is to optimise the clients’ asset portfolio, taking their respective readiness to assume risks, their individual situation and their life plans into account.

Family offices

Family offices handle the large assets of one or more wealthy families. Family office mandates may also include typical administrative services, such as mediation, accounting, office organisation, arranging travel, security management and controlling.

The differences

Whereas wealth managers and family offices primarily look after the needs of private clients, asset managers are mainly focused on institutional investors. Family offices are controlled by wealthy families and offer a comprehensive range of services that go beyond pure wealth management. They are tailored to the specific needs of a family. By contrast, wealth managers are often independent companies controlled by third parties and focused on optimising investment portfolios for a broader customer base.

3. Private equity & venture capital

Private equity

Private equity refers to a form of equity capital whereby investments are made into shares of unlisted, often small or medium-sized companies or startups. The investor provides capital and know-how for a defined period to promote the companies concerned. This form of investing does not occur within regulated markets, such as stock exchanges, and can be carried out by private as well as institutional investors. The main players are often specialised equity capital companies, also known as private equity firms.

Venture capital

Venture capital is a form of private equity financing provided to young companies. External investors invest without collateral, receive company shares and support the company from the early stage of funding right up to expansion. Venture capital firms aim for high profits and offer advisory as well as financial support. Upon fulfilling their task, they will often withdraw and sell their shares to new investors. The representative body for venture capital firms in Switzerland is the Swiss Private Equity & Corporate Finance Association (SECA); the organising body at European level is Invest Europe.

4. Fintech

Fintech, short for financial technology, refers to technology-based solutions in the finance industry that improve, complement or replace existing financial services. Examples of fintech are: mobile payment apps, robo-advisors and crypto-asset exchanges.

Innovation plays a central role for the competitive capacity of the Swiss financial centre which is undergoing a dynamic development process.

In 2022, numerous Swiss banks and insurance companies increased their IT resources, in particular, in view of the transformation of banking through digitisation of business processes. This points to growing innovation in the traditional Swiss financial sector.