Regional Banks in Switzerland: A Practical Guide

Alongside countrywide Swiss banks like UBS, Postfinance, and Migros Bank, among others, Switzerland is also served by numerous regional banks. A differentiation is made between regional banks, cantonal banks, and Raiffeisen banks. However, most Raiffeisen banks and many cantonal banks are also regional banks in the sense that they do a large part of their business in a certain region or canton, rather than countrywide.

What is a regional bank?

In general terms, regional banks and savings banks, as defined by the SNB, are banks that concentrate their banking activities on one or several municipalities or cantons, and focus primarily on savings and mortgages. Banks in this category may be corporations or cooperatives. Just under 60 Swiss banks fall under the regional bank category. Some of these banks cooperate with each other under umbrella groups, such as Clientis and Entris.

What is a Raiffeisen bank?

A Raiffeisen bank is a cooperative bank that operates based on Raiffeisen principles, such as customer participation in ownership. More than 200 different Raiffeisen banks operate across Switzerland, generally within specific regions. All of these banks operate under the umbrella of Raiffeisen Switzerland, and share the Raiffeisen ATM network and the Members Plus bank reward program, among other things. However, fees, charges, and interest rates vary between individual Raiffeisen banks.

What is a cantonal bank?

A cantonal bank is a special category of bank in which the government of a canton holds a stake of at least one-third. While cantonal banks are regional in the sense that their branch offices and ATMs are generally limited to one canton, their banking activities are not limited to the canton they serve. Some large cantonal banks, like the Zürcher Kantonalbank, offer standard banking services within their home canton, but also offer many other services that are not typical for regional banks.

Of the 26 cantons, only Solothurn and Appenzell Ausserrhoden do not have a cantonal bank. Of the 24 cantonal banks, 21 benefit from a full state guarantee, which means account balances are fully guaranteed by the corresponding canton. Three cantonal banks, namely the Berner Kantonalbank, the Banque Cantonale Vaudoise, and the Banque Cantonal de Genève, do not have state guarantees. Customers of a cantonal bank can make fee-free withdrawals at ATMs operated by all cantonal banks.

Which banking services do Swiss regional banks offer?

Regional banks offer basic banking services like private accounts, debit cards, savings accounts, and mortgages. Some also offer other services like credit cards, safe deposit boxes, medium-term notes, pillar 3a accounts, vested benefits accounts, asset management, stockbroker services, personal loans, business loans, and student loans.

Do regional banks accept customers from other regions?

Each bank has its own criteria for accepting customers. Many regional banks accept customers from all parts of Switzerland, but there are banks that only accept new customers who live in the region they serve.

Do regional banks have Twint?

A number of Swiss regional banks have their own Twint apps. If you have an account at a regional bank that does not have its own Twint app, you can still use Twint by linking your private account to the neutral prepaid version of Twint.

Do regional banks have online banking and mobile banking?

The vast majority of Swiss regional banks now offer both web-based online banking and app-based mobile banking. Among other things, you can use these to view your account balances, make bank transfers, set up standing orders, pay QR-Bills and eBills, manage your debit card, and receive electronic account statements and other documents.

What are the advantages of using regional banks?

There are big differences between individual regional banks. However, many regional banks offer some or all of the following advantages:

• Local expertise: Regional banks often have a founded knowledge of the local real estate markets and business environment in the regions they serve. This can translate into more of a case-by-case approach for services like mortgages and business loans, rather than standardized processes.
• Favorable interest rates: Some Swiss regional banks have exceptionally favorable interest rates, as the moneyland.ch savings account comparison and medium-term note comparison show. Some regional banks also pay interest on the balances of private accounts, which is uncommon in Switzerland.
• Branch offices in less-populated areas: Regional banks often have branch offices in smaller communities that are not served by larger banks. This can be beneficial if you live in a more rural area and frequently use in-person banking services like counter-based banking, consultation, and safe deposit boxes.
• Specialized services: Some regional banks offer specialized products that are not available from most large banks. For example, some regional banks offer reverse mortgages or student loans. Regional banks in border regions may offer special banking services for cross-border workers.
• Personal relationships: Regional banks often have a small, localized customer base. This enables them to provide a more personalized service that can account for many different aspects of your financial life. Depending on your personal preferences, that can be an advantage over large banks and neobanks that focus on automating relationships.
• A sense of community: The money you place in a regional bank is largely used to finance local homes and businesses in your community. Regional banks often sponsor local clubs, organizations, and events. Those that are structured as cooperatives often give you the chance to become a shareholder so that you can attend annual general meetings, vote on key decisions, and receive dividends or preferential pricing or interest rates. Many regional banks have reward programs that entitle you to discounts for local businesses or events.
• Security: Most regional banks invest primarily in mortgages, which are secured by real estate. Swiss real estate is generally considered to be a conservative investment. Theoretically, a small bank with relatively low assets under management is better secured by the Swiss bank depositor protection scheme. The reason is that there is a limit for the total protection provided to bank customers by the scheme.

What are the disadvantages of regional banks?

• Geographical limitations: There are some regional banks only accept new customers who live in the region they serve. But even banks that accept customers from outside their region may limit the geographical scope of certain services. For example, mortgages might be limited to properties in a specific region.
• Few branch offices and ATMs: If you prefer to do your banking in person, the lack of countrywide branch offices can be problematic if you move to another part of the country. If you make a lot of cash withdrawals, then the absence of countrywide ATM networks can result in you having to pay additional fees for using ATMs from other banks. It is worth noting though, that many regional banks do not charge additional fees for withdrawals at out-of-network Swiss ATMs. 
• Possible concentration risks: The strong focus on local real estate in just one region can create a certain amount of concentration risk.
• Limited scope of services: Depending on which regional bank you use, certain banking services, like online trading, may not be available.

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