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Global Financial Regulations 2022

Financial Regulations In Switzerland

Renowned as an international banking and fintech hub, Switzerland enjoys the second-highest GDP per capita in the world and the 18th-largest economy.

Country Overview

Renowned as an international banking and fintech hub, Switzerland enjoys the second-highest GDP per capita in the world and the 18th-largest economy.1 Political neutrality, social stability and huge expenditures on R&D2 have further contributed to the country’s status as a global leader in finance and innovation. The World Intellectual Property Organization (WIPO)’s ;Global Innovation Index 2020 ranks Switzerland #1, for the tenth year in a row.

Although the COVID-19 pandemic drove the Swiss economy to its worst performance in 45 years with a contraction of 2.9%,3 the Alpine country still fared much better than other developed nations and is forecasted to rebound quickly.4 The pandemic has also been key in accelerating Switzerland’s digital transformation.

A Swiss National Bank (SNB) Money Market Event on COVID-19 and digitalization points to pandemic-driven increases in cashless payments and automation in big data as primary catalysts in the country’s digital transformation. This has expanded opportunities for innovation amidst a more uncertain risk landscape, creating new challenges for the central bank. As it emerges from the pandemic, Switzerland’s focuses include the possible development of a central bank digital currency (CBDC), data protection and digital empowerment, strengthening its flagging AML/CFT framework, and competition and innovation in the digital sector.

However, the future of Switzerland’s fintech ecosystem might be largely driven by market forces, supported by an accommodating regulatory landscape. Swiss regulators have not taken as proactive an approach to fintech regulations—especially regarding open banking—as the EU has. Indeed, many Swiss banking and fintech community members construe the EU’s regulatory approach as heavy-handed and instead tout a market-based one.5 They have reason to be confident given the past year’s immense growth in private sector development of fintech and open banking innovations.

In May 2020, Switzerland’s principal stock exchange SIX launched its b.Link platform, which allows financial institutions and third-party providers to securely exchange and access data via APIs. In October 2020, Credit Suisse announced that it would launch a CSX digital portal allowing clients to conduct all banking online. Other leading initiatives include the Open Banking Project and the Swiss Fintech Innovations’ (SFTI) Common API. An increase in competition due to the surging presence of neo-banks will likely spur on even further innovation in the Swiss fintech sector.

Still, this increasingly complex, market-powered landscape will result in changes to regulatory frameworks and the creation of new ones. Regulations on data protection, AML and digital inclusion will be crucial in keeping up with rapidly evolving developments in fintech and ensuring transparency, accountability and security.

Financial Regulatory Bodies

Central Bank: The Swiss National Bank (SNB) is the central bank of Switzerland. The SNB is responsible for monetary policy, with special attention to price stability.

Data Protection Authority: The Federal Data Protection and Information Commissioner (FDPIC) has a supervisory and advisory role in ensuring data protection and transparency in Switzerland.

The Swiss Financial Market Supervisory Authority (FINMA), housed under the Federal Department of Finance, is responsible for financial regulation, including the supervision of banks, securities, stock exchanges and other financial intermediaries.

Standards, Laws and Regulations

Revised Swiss Data Protection Act (revDPA), 2022

Passed in 2020, the revised Swiss Data Protection Act (revDPA) implements many GDPR provisions while allowing for significant differences. The revised Act will enter into force in the second half 2022.

Under the Act, companies will be obliged to immediately report serious data breaches to the Federal Data Protection and Information Commissioner (FDPIC); utilize data protection impact assessments in advance of potentially risky data processing; seek approval before using sub-processors; and issue a privacy notice each time data is collected. In contrast with the GDPR, controllers have the option—but not the obligation—to appoint a data protection officer. Should an intentional violation of the revDPA occur, individuals in lieu of the company could face criminal sanctions. 

Swiss-French Cross-Border CBDC Trial, 06 June 2021

The Banque de France, the Swiss National Bank and the Bank for International Settlements (BIS) Innovation Hub announced that they planned on conducting an investigation—named Project Jura—into cross-border settlements using wholesale CBDCs. The banks have partnered with Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS in executing the project. The experiment will involve a euro CBDC, a Swiss franc CBDC and a French digital financial instrument on a distributed ledger technology (DLT) platform. The Swiss National Bank clarified in the wake of Project Helvetia—which demonstrated the feasibility of linking tokenized digital assets with central bank money—that the introduction of a CBDC is not a guarantee, though the continuing research points to serious intentions in exploring its development.  

FINMA Allows Chip Scanning in Client Onboarding, 05 May 2021

Following a consultation on the revision of the Circular on “Video and online identification,” The Swiss Financial Market Supervisory Authority (FINMA) announced it has approved the use of chip scanning in customer due diligence for client onboarding. Financial institutions will be able to scan chips in biometric identity documents—like biometric passports—thus streamlining the identity verification process. FINMA has not approved “automatic video-based identification followed by downstream manual verification by employees”6 due to security concerns. The authority also announced that geolocation services can be employed to confirm home addresses. The changes will come into effect on 01 June 2021.

Swiss Federal Council Votes to Reform AML Legislation, 19 March 2021

The Swiss Federal Council voted to reform the Anti-Money Laundering Act (AMLA) in anticipation of a 2022 Financial Action Task Force (FATF) audit. Key revisions include enhanced KYC, customer due diligence, transparency and reporting requirements. Financial intermediaries will be obliged to verify customer identity, record the services provided to customers and gather information as to their background and purpose, as well as report suspicions of financial crime to the Money Laundering Reporting Office Switzerland (MLROS). The legislation more closely adheres to international standards, but it does not address areas of concern noted by corruption watchdogs.7

Indeed, Switzerland’s money laundering landscape is fraught with risk, and the state lags well behind other developed nations in the strength of its AML/CFT framework. A 2020 report by the Basel Institute for Governance on ML/TF risks around the globe has ranked Switzerland #93 of 141 countries on a worst-to-best scale. The score is a composite of information regarding risks related to, amongst other factors, the country’s AML/CFT framework. According to the Basel report, Switzerland’s mediocre score is partly attributable to a high level of financial secrecy, which diminishes the efficacy of its AML/CFT framework. In a 2020 interview with Swiss newspaper TagesAnzeiger, former head of the MLROS Thelesklaf pointed to a lack of political will in pursuing reforms and outdated technology in processing reports from banks.

CBDC Research: Project Helvetia Demonstrates Viability of Linking Tokenized Digital Assets with Central Bank Money, 03 December 2020

According to the Bank for International Settlements (BIS) report, “Project Helvetia is a joint experiment by the BIS Innovation Hub (BISIH) Swiss Centre, SIX Group AG (SIX) and the Swiss National Bank (SNB), exploring the integration of tokenised assets and central bank money on the SDX platform.” The successfully executed experiment demonstrates the legal and functional viability in integrating tokenized digital assets with central bank money, although the Swiss National Bank clarifies that this does not point to a sure launch of a wholesale central bank digital currency (CBDC) and that a retail CBDC is out of the question. Further experimentation is underway and due to be completed by Q3 2021. Despite uncertainties as to an eventual CBDC introduction, the growing popularity of stablecoins in Switzerland might increase pressure on the central bank to develop its equivalent.

In conjunction with Project Helvetia’s completion, BISIH announced a plan to establish five new innovation hubs in London, Toronto, Stockholm, Frankfurt and Paris, which will partner with local central banks, Nordic central banks and the Eurosystem. Andréa M. Maechler, governing board member of the SNB, stated in a press conference on Project Helvetia that the expansion of BISIH will allow for an increased focus on strategic priorities, including CBDCs, open finance, cybersecurity, APIs and new financial market infrastructures.8

FINMA Publishes 2020 Risk Monitor, 11 November 2020

The Swiss Financial Market Supervisory Authority published its 2020 risk monitor, which outlines the 2020 threat landscape and its evolving supervisory focus. The dominant theme is the COVID-19 pandemic, which put pressure on the financial system in contributing to the emergence of new risks and exacerbating existing ones. A principle threat has been a rise in cyber risks, including increases in the distribution of malware, phishing emails and distributed denial-of-service (DDos) attacks.

Although the overall risk level in money laundering has stayed the same, the landscape has shifted with the advent of new technologies. For the first time, FINMA identifies blockchain technology-based digital assets as a risk to the financial industry. Anonymity and “the speed and cross-border nature of the transactions” can aggravate ML/TF risks. This is especially problematic given the prevalence of crypto use in Switzerland, its lack of a comprehensive regulatory framework on virtual currency and reputation as a money laundering haven.9

Parliament Approves Revised Swiss Federal Act on Data Protection, 25 September 2020

The revised Swiss Federal Act on Data Protection (FADP) implements many GDPR provisions while allowing for significant differences. Obliged entities will, for the most part, not undergo major changes in the processing of personal data, although new documentation, auditing and reporting requirements have been established. Companies will be obliged to immediately report serious data breaches to the Federal Data Protection and Information Commissioner (FDPIC); utilize data protection impact assessments (DPIA) in advance of potentially risky data processing; seek approval before using sub-processors; and issue a privacy notice each time data is collected. In contrast with the GDPR, controllers have the option—but not the obligation—to appoint a data protection officer. Should an intentional violation of the revDPA occur, individuals in lieu of the company could face criminal sanctions. The revised act will enter into force in 2022.

Parliament Approves the Swiss DLT Act, 25 September 2020

Parliament adopted the Federal Act on the Adaptation of Federal Law to Developments in the Technology of Distributed Electronic Registers, which clears up legal uncertainty surrounding DLT in securities, creates a new and independent DLT financial infrastructure and imposes requirements on DLT trading facilities. On 01 February 2021, provisions related to the launch of blockchain-based securities came into effect. The remaining provisions will come into force August 2021.

DLT is swiftly becoming a central feature of the Swiss financial system. Cryptocurrency has become so popular that the canton of Zug, as of February 2021, now accepts tax payments in bitcoin and ether, while the municipalities of Zermatt and Chiasso allow bitcoin for smaller tax payments.10 Following in the footsteps of rivals Goldman Sachs and Morgan Stanley, UBS is considering offering digital currency investments in response to soaring demand.11

The flourishing crypto scene has not come without blips, especially in light of regulators’ concerns over the increased risk of ML in crypto transactions. Switzerland’s leading crypto banker, Bitcoin Suisse, applied for a banking license in mid-2019, but a 17 May 2021 FINMA press release reveals that the authority informed the company it is ineligible for approval. FINMA expressed concern regarding weaknesses in Bitcoin Suisse’s AML mechanisms.

Publication of Digital Switzerland Strategy, September 2020

The Federal Council’s Digital Switzerland Strategy outlines guidelines and specific measures towards implementing the country’s digitalization goals across multiple sectors, including the economy. Overall objectives include support for: digital inclusion; security, trust and transparency; individuals’ digital empowerment; innovation and competition; and environmental and climate goals. The overall strategy is underpinned by four principles: digital inclusion, digital development, state support to reduce friction amidst structural change and a cross-sectoral approach to digitalization, and each section outlines how it helps in meeting UN sustainable development goals.

he section on digital transformation in the economy addresses ambitious goals alongside existing conditions. Highlights include:

  1. “4.6.1. Switzerland is characterised by a high employment rate and good-quality working conditions 
  2. 4.6.2. Switzerland will provide room for the development of new business models 
  3. 4.6.3. An innovative, globally networked fintech sector improves the competitiveness of the 
  4. Swiss finance industry 
  5. 4.6.4. The cities, municipalities and regions of Switzerland are characterised by a high capacity for innovation 
  6. 4.6.7. Switzerland will take advantage of its opportunities with regard to the virtual international economy” 

A section on “Data, digital content and artificial intelligence” addresses the possible development of a  Swiss cloud, the importance of individuals’ control over their data, the improved access to digital content, the development of open data, a responsible and transparent approach to AI and a “modern, coherent” regulatory framework underpinning rights to and use of data.


1. Bajpai, Prableen. “World's 5 Richest Nations By GDP Per Capita.” Nasdaq, 20 May 2021. https://www.nasdaq.com/articles/worlds-5-richest-nations-by-gdp-per-capita-2021-05-20

2. “Research and development expenditure (% of GDP) – Switzerland.” World Bank. https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS?locations=CH&most_recent_value_desc=false

3. Allen, Matthew. “Swiss economy suffers worst slump in 45 years.” Swissinfo, 26 February 2021. https://www.swissinfo.ch/eng/swiss-economy-suffers-worst-slump-in-45-years/46403548

4. “Switzerland: Staff Concluding Statement of the 2021 Article IV Mission.” The International Monetary Fund, 07 April 2021. https://www.imf.org/en/News/Articles/2021/04/06/mcs040621-switzerland-staff-concluding-statement-of-the-2021-article-iv-mission

5. Franklin, Jimmie. “The Swiss Prefer Regulation-Free Open Banking.” VIXIO, 15 September 2020. https://pc.vixio.com/article/63152/insights/swiss-prefer-regulation-free-open-banking

6. “FINMA allows chip scanning in online identification process.” FINMA, 17 May 2021. https://www.finma.ch/en/news/2021/05/20210517-mm-rs-16-07-online-identifizierung/

7. “Swiss lawmakers have agreed to revise the money laundering law but have rejected new rules for lawyers, notaries and other consultants.” Swissinfo, 10 March 2021. https://www.swissinfo.ch/eng/parliament-agrees-modest-tightening-of-anti-money-laundering-law/46435970

8. Franklin, Jimmie. “Swiss Shy Away From Retail CBDC.” VIXIO, 03 December 2020. https://pc.vixio.com/article/64094/insights/swiss-shy-away-retail-cbdc

9. “Swiss lawmakers have agreed to revise the money laundering law but have rejected new rules for lawyers, notaries and other consultants.” Swissinfo, 10 March 2021.

10. Khatri, Yogita. “Swiss canton Zug now accepts bitcoin and ether for tax payments.” The Block, 18 February 2021. https://www.theblockcrypto.com/linked/95270/swiss-canton-zug-now-accepts-bitcoin-ether-tax-payments

11. Choudhury, Ambereen et al. “UBS Explores Offering Crypto Investments to Rich Clients.” Bloomberg, 10 May 2021. https://www.bloomberg.com/news/articles/2021-05-10/ubs-exploring-ways-to-offer-crypto-investments-to-rich-clients

*DISCLAIMER: This information is OneSpan's interpretation of the compliance requirements as of the date of publication. Please note that not all interpretations or requirements of the applicable laws are well-settled and its application is fact- and context-specific. The information contained in this document should not be relied upon as legal advice or to determine how the law applies to your business or organization. We encourage you to seek guidance from your legal counsel with regard to law applying specifically to your business or organization and how to ensure compliance. This information is provided “as-is” and may be updated or changed without notice. OneSpan does not accept liability for the contents of these materials.

Last updated: November 2021