Credit Suisse takes aim at Revolut
Neobanks including Revolut are steadily gaining market share in Switzerland. Now though, Switzerland’s No. 2 is readying itself to launch a counterbid.
Credit Suisse will present a digital strategy for the Swiss mass market, including the retail business and the services for small companies, in mid-September. André Helfenstein, the CEO at the Swiss division of Credit Suisse, today granted journalists an early taste of what they can expect.
Digital Banking, the new unit, will first launch an account and card service offering – pretty much like fintechs have chosen to reach the market first, Helfenstein suggested.
The Swiss banking giant will probably aim its new product line at the neobanking industry, which includes Swiss companies Zak, Neon and Yapeal as well as N26, Transferwise and Revolut. The latter, which is known as Europe’s most valuable fintech, has already more than 350,000 clients in Switzerland.
A recently publish study showed that every tenth Swiss banking client has at least once used a service by a neobank.
The challengers are mainly active in the business with cheap accounts and cards, the services that Credit Suisse Switzerland will likely launch first too. The challenge by the new players has become a concern for the established banks as they aim at the customer interface. Once these have been lost, banks will be reduced to mere providers of financial services.
Switzerland’s No. 2 in June had announced the issue of a debit-Mastercard which allows clients to make payments abroad that are free of charge.
The new digital banking of Credit Suisse has much in common with how the fintech world has built its business. Instead of simply making one’s services digital, the Credit Suisse strategy is to build from scratch. They will allow the bank to make improvements much faster and adapt to changing habits.
The bank is a also challenger in the retail business, because it is «only» the No. 3 in that segment in Switzerland. It now hopes to gain market share with an offering that should prove attractive to the young, a market where Credit Suisse traditionally hasn’t been too strong, as Helfenstein admitted on Tuesday. He definitely aims to change this and improve the marketing efforts of the banks.
The digital strategy may help Credit Suisse make up for a handicap it has compared with UBS and Raiffeisen. The bank operates a smaller network of branches, but as clients stop going to a physical branch, these offices tend to become surplus to requirements. Credit Suisse today has 146 branches and will pare the number to 109.
The bank has made clear that the new digital bank won’t be going it alone. In merging all things digital and direct banking into the new digital banking unit under the guidance of Anke Bridge Haux, Credit Suisse showed how intends to maintain the relationship between group and digital banking.
Bank Clear and Postfinance both chose another path with the banking app Zak and payment app Twint respectively. Twint has more than 2 million customers, which is more than Credit Suisse has in Switzerland.