Large financial centres today have vastly expanded their digital capacity. To remain competitive on an international scale, the Swiss banking industry needs a regulatory framework that supports the future evolution of technology.
In the United Kingdom, regulatory authorities have taken a proactive approach: the Financial Conduct Authority plays a key role in promoting economic development by supporting FinTech companies through its ‘innovation hub’ programme.
In Switzerland, the Federal Council has adopted a ‘Digital Switzerland Strategy’ calling for close cooperation among all economic sectors. The FINMA, meanwhile, has decided to authorise online identification of banking clients, an important development for an international financial centre like Geneva, and one that is likely to benefit both retail banks and institutions specialising in wealth management.
To ensure the financial centre remains competitive and continues to innovate, government and political leaders must provide a determined regulatory impetus, in order to give Switzerland a legal framework that supports the development of FinTech and does not discourage innovation.
The regulation of artificial intelligence
The EU Regulation on Artificial Intelligence (AI) came into force on 1 August 2024. The Regulation assigns AI applications to three risk categories. First, applications and systems that create an unacceptable risk, such as government-run social scoring systems, are banned. Second, high-risk applications such as a CV-scanning tool that ranks job applicants, are subject to specific legal requirements. Lastly, applications not explicitly banned or listed as high-risk are largely left unregulated.
In Switzerland, the Federal Council stated on 12 February 2025 that it was pursuing three objectives in this area: strengthening Switzerland as a location for innovation, protecting fundamental rights, including economic freedom, and increasing public trust in AI. In order to achieve these goals, it has set out the following three key points:
- The Council of Europe Convention on AI shall be incorporated into Swiss law. Its scope primarily concerns state actors.
- Where legislative amendments are necessary, they should be sector-specific as far as possible. General, cross-sector regulation is limited to the relevant core areas of the law, such as data protection.
- In addition to legislation, non-binding legal instruments are being developed to implement the Convention. They may include self-regulatory agreements or sectoral solutions.
With this aim in mind, the Federal Council instructed the Federal Department of Justice and Police (FDJP) to draw up a draft consultation document by the end of 2026 in order to implement the Council of Europe Convention on Artificial Intelligence, identifying the legal measures required in the areas of transparency, data protection, non-discrimination and surveillance.
