Swiss financial institutions are increasingly recognizing the potential of blockchain technology and are incorporating it into their long-term growth strategies. A recent study conducted by the University of St. Gallen, in collaboration with vision& and mintminds, revealed that over 80% of Swiss banks are either actively developing or planning to expand their blockchain-based services, with a focus on cryptocurrencies.
Crypto Services Gaining Momentum
The study, which surveyed 19 Swiss banks between April and June 2024, included retail, private, universal, and investment banks. The findings highlighted that more than 60% of these institutions are prioritizing cryptocurrency-related services, with half of them placing high importance on expanding their crypto offerings. This growing interest indicates that traditional banking institutions are beginning to accept and adopt cryptocurrencies as a legitimate asset class.
One of the key areas of development is custodial services, with around 60% of the surveyed banks either implementing or planning to offer these services. Custodial services are critical for the secure storage of digital assets, and their expansion is a clear indicator of the banks’ confidence in the future of cryptocurrencies.
In addition to custodial services, trading services for cryptocurrencies are also emerging as a priority for these banks. Around 60% of the respondents emphasized the importance of enabling clients to buy and sell digital currencies as part of their service offerings. Exchange-traded products (ETPs) and certificates, which track the value of cryptocurrencies and can be traded on traditional stock exchanges, are also gaining popularity. Approximately 60% of the banks surveyed intend to offer these products, providing an alternative avenue for investors to participate in the crypto market.
Tokenized Assets on the Horizon
Swiss banks are also showing increased interest in tokenized assets, which are physical or digital assets converted into blockchain-based tokens. These tokens make assets easier to trade, divide, and track, offering enhanced liquidity and transparency. The study found that 47% of the banks are planning to develop tokenized asset services, although many institutions are still in the early stages of familiarizing themselves with this technology.
The potential for asset tokenization is significant. Global forecasts from consulting firms like Boston Consulting Group (BCG) and digital exchange ADDX predict that asset tokenization will grow into a US$16.1 trillion market by 2030. The drivers of this growth include greater access to private markets, improved liquidity, and increased recognition by regulatory authorities. These benefits are likely to motivate Swiss banks to further explore tokenized assets as a core offering in the near future.
Blockchain Strategy and Innovation
The study also highlighted that nearly 60% of the banks surveyed have developed or are in the process of implementing a comprehensive blockchain strategy. Among these, 16% view blockchain as a high-priority topic, and most of these institutions have already launched their initial blockchain-related services in 2023 or earlier. Notably, banks with more employees involved in blockchain projects or larger financial institutions tend to be further ahead in their blockchain integration efforts.
Motivations for adopting blockchain vary among Swiss banks. Approximately 40% of institutions see blockchain primarily as a tool for driving innovation within their operations. In contrast, 21% are pursuing more aggressive growth strategies, expecting the technology to lead to significant increases in managed assets and customer numbers. A smaller portion, about 11%, are taking a defensive stance, viewing blockchain as a way to mitigate the risk of customer losses and outflows of assets under management.
The research also noted that many banks are exploring advanced applications of blockchain technology beyond cryptocurrency and tokenized assets. Approximately 58% of the respondents reported active efforts in developing these more advanced uses, driven by a general desire to innovate and remain competitive in the evolving financial landscape.
Conclusion: Paving the Way for Blockchain in Banking
As blockchain technology continues to mature, Swiss banks are positioning themselves to capitalize on its transformative potential. With growing interest in cryptocurrencies and tokenized assets, coupled with the adoption of blockchain strategies, these institutions are laying the groundwork for a future where digital assets play a more central role in finance. As larger banks with greater resources continue to lead the charge, it is likely that blockchain will become an integral part of Swiss banking, driving innovation, efficiency, and growth.