Banking Privacy in Switzerland: What Swiss Banks Provide Maximum Confidentiality?

Even though Switzerland is a member of the CRS group, the country remains one of the most secure jurisdictions to keep your money. Nearly half of all the capitals kept in Swiss banks belong to foreigners and the banking sector brings 10% of the country’s GDP. 

There are more than 250 banks in Switzerland and not all of them offer top levels of secrecy. Let’s see what Swiss bank you should choose if confidentiality of your banking information is among your top priorities.

What Swiss banks provide the highest levels of secrecy?

Until recently, the following three banks were regarded as the most secret Swiss banks:

• Credit Suisse;
• It’s large competitor UBS;
• And Pictet private bank.

However, some dramatic changes have taken place in Credit Suisse and the administration of Pictet has undergone restructuring too. These changes have lowered the level of confidentiality that the two financial institutions currently offer.

No Swiss bank can keep your financial information totally secret today. All banks in the country have to fulfill their obligations pertaining to information exchange and cooperate with local as well as foreign law-enforcement agencies.

If you are looking for the highest possible level of confidentiality of your banking information in 2023, you can consider the following three banks stationed in Switzerland:

• UBS Group. The largest Swiss financial holding was founded in 1998 when Union Bank of Switzerland merged with the Swiss Banking Corporation. The bank offers a wide spectrum of services to private and corporate clients. These include capital management, card issuance, digital banking, loans, mortgages, and many others. The USB headquarters are located in Zurich, and branch offices can be found in a great number of countries. Capitalization of the bank was 982.34 billion euros in 2022.
• Credit Suisse Group AG remains one of the banks with the highest level of information confidentiality notwithstanding the global crisis and the recent scandals that it was involved in. Currently, the bank is incurring huge losses but the administrators promise that the situation should improve by 2024. A large number of wealthy clients have been leaving the bank over the last two years and this fact may raise some security concerns. At the same time, Credit Suisse had 729.04 billion euros in assets in 2022, which is an indication of the bank’s liquidity and good growth perspectives.
• Raiffeisen Gruppe has over 800 branch offices in Switzerland alone plus hundreds of offices in other countries. Raiffeisen offers individual consultations on pension savings, estate planning, investments, insurance as well as savings accounts and loans. Capitalization of the bank was 274.41 billion euros in 2022. The bank has been steadily growing for many years.  

Other Swiss banks that offer high levels of information confidentiality include the following ones:

• Zurich Kantonalbank;
• Julius Baer Group;
• Banque Cantonale Vaudoise;
• EFG International;
• Basler Kantonalbank;
• Luzerner Kantonalbank;
• Galler Kantonalbank.

Changes in the Swiss banking sector

Swiss banks are unable to offer complete confidentiality of their clients’ information any longer. This is due to the changes that have taken place in the global banking system.

Some changes also occur on a regular basis. Given the large number of banks in Switzerland, it is not a surprise that some of them close from time to time. More often, however, banks merge or take new names.

If you are considering the opportunity to bank in Switzerland, you should investigate very carefully where the particular bank stands. It is true that Switzerland is one of the most popular banking jurisdictions in the world but not all banks in the country are equally reliable.

Swiss banks that have closed or merged

• BANCA ARNER SA has merged with GS Banque — it’s one bank now.
• Bank am Bellevue AG has closed.
• Bankhaus Jungholz AG has been purchased by Alpha Rheintal Bank.
• Bertrand Strudza bank in Paris has been purchased by Rothschild Bank AG.
• Banque Profil de Gestion SA private bank has been purchased by ONE Swiss bank.
• Falcon Private Bank closed on March 31, 2022.
• Intesa Sanpaolo private bank has been purchased by REYL & Cie – REYL Bank.
• Landolt & Cie has become property of ODDO BHF.
• Millennium Banque Privée was purchased in 2021 by Union Bancaire Privée – UBP Bank.
• Japanese subsidiary Mizuho Bank has closed in Switzerland.
• Neue Aargauer merged with Credit Suisse on November 27, 2020.
• Israeli subsidiary United Mizrahi Bank was purchased by Hyposwiss Private Bank in 2021.
• Bank Degroof Petercam Ltd was purchased by Gonet & Cie | Gonet Bank on January 1, 2022.

Swiss banks that have changed their names

• Berenberg Bank Switzerland Ltd has been renamed to Bergos AG.
• BLOM BANK Switzerland has been renamed to Banque Banorient Suisse SA.
• Hinduja has been renamed to S.P. Hinduja Banque Privée SA.
• Van Lanschot has been renamed to F. van Lanschot Bankiers (Schweiz) AG.

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The Swiss banking sector today

The global economic crisis, the Covid-19 pandemic, the geopolitical turmoil, and the sanctions have changed the climate in the banking sector in all countries including Switzerland.  

However, even with the view of increased risks, the banking industry continues to prosper in Switzerland. The world is becoming a more insecure place to live and people from many countries are looking for a safe place where they could keep their money. Few countries can outperform Switzerland in banking security. Even though the information privacy has decreased, it has not totally disappeared. There are laws in Switzerland that efficiently protect banking information from unauthorized access.

What is allowed and what is prohibited in Swiss banks: secrecy and information exchange in 2023

Below please find several facts about banking privacy in Switzerland. You have to bear these facts in mind when deliberating opening an account with a Swiss bank.

1. Under pressure from the USA and the EU (especially Germany), Switzerland has changed some of its banking privacy laws. Now tax evasion is qualified as a criminal offense. 
2. As far as tax reporting is concerned, it is the responsibility of the bank clients to do the reporting. The bank is not allowed to share the client’s information with third parties including fiscal authorities without the client’s consent. We have to note at this point, that tax evasion has been considered a criminal offense since 2015 in Switzerland. If the tax debt of a local tax resident exceeds 250,000 Swiss francs, he or she may face imprisonment. 
3. Switzerland automatically exchanges fiscal information with about 100 countries. Besides, it follows the FATCA requirements and submits the information about American bank account holders to the IRS. The reports are files once a year. The information about individual account holders is not supplied to the fiscal authorities of foreign countries. Rather, they are informed about the total amount of money that their citizens keep in Swiss banks. 
4. In the framework of the Exchange of Information on Request regulation, the information about an individual account holder may be supplied to foreign country’s authorities but only on their official request. A Swiss bank will cooperate with foreign law enforcement agencies only if its client is accused of a crime that entails a three-year imprisonment or more. Besides, conclusive evidence of the crime has to be submitted for the cooperation to start.
5. If a foreign client of a Swiss bank comes from a country that has not signed an information exchange agreement with Switzerland, his or her information will not be submitted to the fiscal authorities of his/ her home country. It’s going to be highly problematic for such a person to set up a bank account in Switzerland but it is not impossible.
6. If the bank administration suspects a client of money laundering, it is obliged to report it to the authorities in Bern. Naturally, banking privacy does not apply to situations of tax fraud and document forgery. If a foreign client is found guilty of these crimes, his/ her entire banking information will be disclosed to his/ her home country’s authorities.
7. It may happen that a creditor wants to find out if his/ her debtor has an account with a Swiss bank. If the creditor makes an inquiry about it with the bank administration, he/ she will have to come away none the wiser. This sort of information will never be disclosed to the creditor under any circumstance. 

Many Swiss bank clients use offshore trusts and funds to protect their assets from foreign creditors and court decisions. One of the most secure and reliable options available today is a combination of a trust and on offshore company in Nevis.

How well is financial secrecy protected in Switzerland? 

Switzerland is probably the most secure jurisdiction where you can bank. As far as banking privacy is concerned, the country ranks second trailing only the USA. Singapore comes third. Besides, clients of Swiss banks are guaranteed to have at least 100,000 Swiss francs if bad comes to worse and the bank fails (which hardly ever happens in Switzerland). 

The initiators of the Tax Justice Network call upon finance ministers of the EU and G7 countries to create an international register of bank account holders. Officials in no country in Europe including Switzerland are prepared to support creating such a register. Experts believe that the register would defeat the concept of banking privacy and confidentiality of banking information.