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Darko Stefanoski
Partner
Darko Stefanoski is the Law (including Digital Law) Leader for Financial Services Switzerland at EY, based in Zurich. He advises Swiss and international financial institutions, FinTechs, and corporates on banking and financial market regulation, crossborder services, FINMA licensing procedures, and corporate governance. His practice focuses on digital transformation and emerging technologies, including blockchain and distributed ledger technology, digital assets, RegTech, and LegalTech. Darko holds a law degree from the University of Zurich, is an attorney-at-law and notary public and earned a CAS in Financial Market Law as well as an LL.M. in International Banking and Finance Law from the University of Zurich. He also lectures at the University of Zurich and the Bern University of Applied Sciences.
Kelly Ching
Senior Manager
Kelly Ching is a Senior Manager in Financial Services Legal, Regulatory & Compliance at EY in Zurich, where she also serves as CoHead of Sustainable Finance Law. She advises Swiss and international financial institutions on banking and financial market law and regulatory compliance. Her practice includes corporate governance, capital markets and derivatives, sustainable finance and ESG regulation, Swiss and international licensing and exemption procedures, regulatory aspects of corporate restructurings/ transactions and regulatory change projects. Prior to joining EY, Kelly practiced at an international law firm in Canada. She is an attorney-at-law (Canada) and has a CAS in Financial Market Law from the University of Zurich. She also holds a Certificate in ESG Investing from the CFA Institute.
Cathy O’Neill
Senior Consultant
Cathy O’Neill is a Senior Consultant in the Financial Services Legal, Regulatory & Compliance team at EY Zurich. She advises Swiss and international financial institutions with a focus on digital law matters including artificial intelligence, data protection and digital assets. Cathy holds a Bachelor of Law from University College Cork, Ireland, and a Master’s degree in International Law from the University of St. Gallen, Switzerland. She also holds an Artificial Intelligence Governance Professional (AIGP) certification from the International Association of Privacy Professionals.
Swiss Banking: Key Developments and Latest Trends (2025-2026)
Against a backdrop of rapidly evolving regulation, we will consider the key trends that shaped the Swiss banking landscape in 2025 and those expected in 2026. We draw insights from EY’s Horizon Scanning tool that provides a structured, forward-looking view of regulatory change, capturing and analysing developments by sector to help financial institutions anticipate emerging risks, supervisory priorities and strategic implications.
Six regulatory domains stand out as particularly consequential during this period. These are: banking stability, capital requirements, recovery and resolution; ESG and climate-related regulation; AML, transparency and sanctions; crypto-assets and digital finance; cybersecurity, operational resilience and the growing use of supervisory technology; and artificial intelligence.
As regulatory change accelerates alongside technological and business transformation, Swiss banks face a fundamental question: how can the industry keep up as regulation and transformation race ahead? Addressing this question extends beyond technical compliance and calls for a clear view of how regulatory expectations will shape future competitiveness.
Banking Stability, Capital Requirements, Recovery & Resolution
2025 has marked a pivotal strengthening of Switzerland’s banking stability framework, largely shaped by the lessons drawn from the Credit Suisse crisis. The Swiss Federal Council (FC) and FINMA advanced a coordinated reform agenda targeting capital adequacy, liquidity resilience, governance accountability, and crisis management, with several measures still under consultation as of early 2026.
In June 2025, the FC defined key parameters for amendments to the Banking Act and related ordinances aimed at enhancing the “too‑big‑to‑fail” (TBTF) regime. These include stricter capital requirements for systemically important banks (SIBs) with foreign subsidiaries, the introduction of a statutory senior managers regime, enhanced recovery and resolution planning, and expanded supervisory powers for FINMA, including earlier intervention and the ability to impose fines. FINMA publicly supported these measures, emphasising their importance for improving governance, strengthening preventive supervision, and expanding the crisis toolkit.
On 21 October 2025, Switzerland and the United Kingdom agreed to extend the Service Mobility Agreement (SMA) until 31 December 2029. This extension ensures continued reciprocal access to service markets following the end of free movement of persons after the UK’s withdrawal from the EU. It further supports regulatory continuity and economic predictability, indirectly strengthening Swiss banking stability.
A cornerstone proposal requires SIB parent entities to fully deduct participations in foreign subsidiaries from CET1, preventing double leverage and insulating the Swiss parent’s capital from foreign losses. The implementation of Basel III as of 1 January 2025 provides the technical foundation for the next phase of Swiss capital reform. Basel III serves as a segue into targeted national adjustments, notably the forthcoming revisions to the Capital Adequacy Ordinance (CAO). The FC opened a formal consultation to amend the Banking Act and the CAO, incorporating measures from the FC’s Banking Stability Report and the Parliamentary Investigation Committee, including stricter treatment of assets that are not sufficiently recoverable in a crisis (e.g., capitalised software, deferred tax assets). The consultation package, which is focused on prevention, liquidity and expanding crisis management tools, ran until 9 January 2026. In parallel, the FC confirmed that the CAO consultation launched in 2025 (mandated in April 2024) ran until 29 September 2025 and now awaits the outcome report.
FINMA is consolidating key prudential requirements into formal ordinances. The new Risk Diversification Ordinance (RDO‑FINMA) and Liquidity Ordinance (LiqO‑FINMA) will replace three existing FINMA circulars and are expected to enter into force on 1 January 2027. These ordinances largely codify existing requirements while incorporating Basel III‑aligned refinements and new technical provisions linked to the FC’s TBTF reforms, including enhanced liquidity and financial planning obligations.
Recovery and resolution planning requirements were further reinforced in 2025. FINMA’s annual review of emergency and recovery plans for systemically important domestic banks confirmed compliance for some institutions, while identifying capital shortcomings in others. FINMA also signalled its support for expanding resolution options and strengthening its crisis response framework, including contingent liquidity assistance mechanisms.
FINMA has also adopted a consolidated Insolvency Ordinance, effective 1 October 2025, harmonising insolvency procedures across banks, insurers and collective investment schemes. The new ordinance incorporates lessons from recent crises and prior legislative revisions, streamlining resolution processes while maintaining institution‑specific safeguards where necessary.
ESG & Climate
ESG and climate regulation in Swiss banking has shifted decisively from transparency to risk integration. The Climate and Innovation Act, in force since 1 January 2025, legally anchors Switzerland’s net‑zero‑by‑2050 objective and explicitly calls for financial flows to be aligned with a climate‑friendly trajectory. While implementation relies largely on incentives and recommendations, the Act positions the financial sector as a key enabler of the transition.
FINMA’s Circular on nature‑related financial risks, published in December 2024, expands supervisory expectations by broadening the focus from climate risk to a comprehensive nature‑risk framework, covering biodiversity loss and environmental degradation. The Circular enters into force in stages from 2026, with full application by 2028, and embeds these risks into governance, scenario analysis and core risk management.
Regarding disclosure, Switzerland has paused reform. Amendments to the Climate Disclosure Ordinance intended to align reporting with ISSB and ESRS standards from 2026 were put on hold in mid‑2025 to maintain international comparability, with final decisions expected no later than 2027. Greenwashing prevention remains anchored in self‑regulation. The FC continues to refrain from state regulation but will reassess the need for action by the end of 2027. This places heightened pressure on industry standards, notably the Swiss Banking Association’s (SBA) updated guidelines, which now explicitly require ESG compliance checks to be included in internal audits and external audit reviews.
AML, Transparency & Sanctions
Switzerland entered a new AML transformation cycle over the past year, driven by domestic reforms and the need to address long‑standing Financial Action Task Force (FATF) recommendations ahead of the next mutual evaluation. The most far‑reaching change is the adoption of the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA), passed by Parliament in September 2025. LETA establishes a central federal beneficial‑ownership register accessible to authorities and AML‑obliged entities, with entry into force expected in H2 2026 following the adoption of implementing ordinances. This reform reshapes client due diligence and source‑of‑wealth verification across the banking sector.
Supervisory and self‑regulatory expectations are evolving in parallel. The SBA issued dedicated guidance on AML due diligence in multi‑banking arrangements, clarifying transaction monitoring, allocation of responsibilities and information‑sharing obligations. This reflects regulators’ increasing focus on complex digital value chains and shared infrastructures.
Digital onboarding is also being modernised. In December 2025, FINMA launched a consultation on a partial revision of Circular 2016/7, enabling the use of the forthcoming Swiss e‑ID for AMLA‑compliant client identification. Once in force (expected mid‑2026), this will significantly streamline remote onboarding while tightening address‑verification requirements.
In parallel, Switzerland continued to tighten sanctions enforcement in line with evolving EU regimes, particularly relating to Russia and other high‑risk jurisdictions, supported by frequent ordinance updates throughout 2025. At the intelligence level, cooperation intensified, with the Money Laundering Reporting Office (MROS) expanding international information‑sharing through new Memorandums of Understandings.
Crypto & Digital Finance
Swiss banking has clearly shifted from experimentation toward regulated, market-ready digital finance. A central theme has been the evolution of tokenised money, with stablecoins and bank-issued deposit tokens emerging as complementary, but clearly differentiated, instruments.
In April 2025, the SBA published an expert report positioning stablecoins as a strategic opportunity for the Swiss financial centre, provided they are Swiss franc‑denominated, fully regulated, and issued by supervised institutions. Such stablecoins could materially reduce payment frictions, enable programmable use cases and strengthen Switzerland’s monetary sovereignty in the digital economy. At the same time, the SBA explicitly flagged risks, notably deposit disintermediation and potential impacts on bank lending and monetary transmission, arguing for careful design and limits on scale. These considerations have since fed directly into policymaking.
In October 2025, the FC opened a consultation on amendments to the Financial Institutions Act, proposing a dedicated regulatory framework for stablecoin issuance and crypto‑asset service providers. The draft introduces two new licence categories (i.e. payment institution and crypto institution) and tighter requirements around reserves, governance and AML. The consultation closed in February 2026 and the consultation report is expected during summer/autumn 2026. In parallel, Switzerland confirmed its commitment to global tax transparency by adopting the dispatch on automatic exchange of information (AEOI) for crypto‑assets, with data exchange to start in 2027.
Alongside stablecoins, Switzerland has deliberately advanced an alternative: deposit tokens. In September 2025, a consortium led by the SBA, UBS, PostFinance and Sygnum successfully completed a proof of concept demonstrating legally binding interbank payments using tokenised bank deposits on a public blockchain. Unlike stablecoins, deposit tokens remain on banks’ balance sheets and within existing prudential frameworks, combining programmability with financial stability. The SBA is now preparing broader industry testing and standardisation.
Supervisory clarity has also kept pace. FINMA issued new guidance in 2025 on the disclosure of crypto‑based assets in banks’ financial statements, clarifying custody classifications under the Distributed Ledger Technology Act while maintaining unchanged disclosure principles. Additionally, digital finance has extended beyond crypto. The launch of retail multibanking via SIX’s bLink platform in November 2025 marked Switzerland’s practical entry into open finance, creating infrastructure that can eventually interlink tokenised assets, payments and data-driven services. Together, these developments underline a distinct Swiss approach: innovation anchored in legal certainty, bank-led models and systemic stability.
Cyber, Operational Resilience & SupTech
Cyber risk and operational resilience have become top priorities of the Swiss banking agenda, shaped by tighter national coordination, more explicit supervisory expectations, and rapid advances in supervisory technology (SupTech). A key anchor is Switzerland’s National Cyber Strategy (NCS). In May 2025, the FC took note of the first NCS implementation report, confirming tangible progress through stronger coordination structures, active projects across all strategic pillars and enhanced international cooperation.
A major regulatory milestone occurred on 1 April 2025, when mandatory reporting of cyberattacks on critical infrastructure entered into force. By late 2025 and early 2026, over 200 notifiable incidents had been reported to the National Cyber Security Centre, significantly enhancing national threat visibility, incident response and cross‑sector information‑sharing, including for finance. The early introduction of mandatory reporting has strengthened Switzerland’s preventive cyber posture and provided a practical foundation for the strategic coordination and policy progress later reflected in the May 2025 NCS implementation report.
Operational resilience has also been sharpened through the publication of FINMA Guidance 05/2025 in November 2025. FINMA’s focus has shifted from traditional operational risk management toward end‑to‑end resilience, defined as the ability to restore critical functions within defined tolerance levels after a disruption. This approach reflects growing cyber risks, concentration in outsourcing and cloud services, and increased interconnectedness within the financial system. The emphasis on governance, testing, and recovery capabilities aligns Swiss supervision with international standards while retaining Switzerland’s principle‑based regulatory tradition.
In parallel, SupTech has become a strategic priority for Swiss regulators. At the International Organization of Securities Commissions (IOSCO) Annual Meeting in May 2025 and at major international forums later that year, FINMA underscored that Artificial Intelligence (AI) is a fundamental shift for supervision, enabling earlier risk detection, more granular analysis and timelier interventions, while also heightening concerns about cyber risk and cloud dependencies. A joint FINMA-IOSCO global survey confirmed accelerating SupTech adoption, driven primarily by efficiency and insight rather than staff replacement, with investor and consumer protection as leading use cases.
As an integrated supervisory authority overseeing banks, insurers, asset managers and financial markets under one roof, FINMA benefits from a “front‑row seat” to structural change across the entire financial system. This integration allows FINMA to centralise scarce technological capabilities, such as its Data Innovation Lab, and deploy them consistently across all supervisory phases, from authorisation and ongoing supervision to enforcement. Crucially, expertise is not siloed but shared horizontally across divisions.
FINMA articulated its own SupTech strategy around the “3D” framework: Data, Discretion and Discipline. Supervision is increasingly data‑driven, but not data‑dominated: quantitative analytics enhance risk identification, yet qualitative judgment remains essential, particularly in areas such as governance, conduct and culture. The principle of discretion ensures that technology augments, rather than replaces, human judgment, with a strict “human‑in‑the‑loop” for all material supervisory decisions. Finally, discipline through principles anchors SupTech use in Switzerland’s long‑standing, technology‑neutral and principle‑based supervisory philosophy, avoiding rigid rule‑based automation while preserving proportionality and flexibility.
Artificial Intelligence
AI has moved rapidly from experimentation to early-scale deployment across Swiss banking in 2025 and 2026, while regulation is evolving in a distinctly Swiss manner. In February 2025, the FC decided to ratify the Council of Europe’s Convention on Artificial Intelligence, confirming Switzerland’s commitment to a human‑rights‑centred framework. At the same time, it explicitly rejected an EU‑style horizontal AI Act, opting instead for sector‑specific regulation, with cross‑sector rules limited to the protection of fundamental rights such as data protection and non‑discrimination. A Swiss‑specific AI framework combining binding and non‑binding measures is expected by the end of 2026.
For banks, this approach means that AI oversight will be embedded within existing financial market regulation and supervisory practice rather than through a single, prescriptive statute. FINMA’s guidance on AI governance and risk management, issued in December 2024, has therefore become the central reference point. It sets clear expectations around accountability, explainability, data quality, model risk and third‑party dependencies, with particular relevance for AI use in credit decisions, AML monitoring, investment suitability and customer interaction.
Industry initiatives are reinforcing this direction. The SBA’s 2025 report on Generative AI provides a structured adoption model across strategy, organisation and technology, progressing from exploration to scaling and continuous improvement. Together, these developments signal that Swiss banks must prepare now for heightened supervisory scrutiny while continuing to innovate within a principles‑based, innovation‑friendly framework.
Beyond regulation, Switzerland is also strengthening its international positioning in AI governance. In February 2026, the FC confirmed that Geneva will host the World Summit on Artificial Intelligence in 2027, underscoring Switzerland’s role as a neutral convenor for global dialogue on responsible AI, ethics and international standards. Hosting the summit reinforces Switzerland’s ambition to shape global AI governance while balancing innovation, fundamental rights and trust – an agenda that closely mirrors Switzerland’s principles‑based approach to AI regulation and supervision in the financial sector.
