Finance, a changing landscape

Rather than an article, I would like to start the debate, which has been mentioned many times in the newspapers. It is undeniable that the pressure from Western tax authorities on Swiss banks has repercussions. I hear from direct sources and from stories of 'tax-free' customers who are leaving. In the establishments, volumes of 25% are mentioned, which is significant and is all the more so since these are customers with a high margin (the reason is that this specific customer having 1. as a reference point his tax savings and 2. has (had!) little room for maneuver, the banks did not hold back).

The question is how the banking landscape will evolve. Here are my guesses for what they are worth:

1. Some bankers (or wealth managers, below we can use each other) will gain humility because they will have to turn to more demanding, more sophisticated and less dependent clients. I think that some will transform themselves into real advisors and take correct margins, nothing more and above all they will deliver services with real added value (whose price will be transparent). Their remuneration should in my opinion even be independent of the amount under management (or less correlated than currently at least).
2. Others will seek to preserve their margins by concocting structured products whose fees (for the client) and income (for the bank) will be well hidden. This will work for relatively small portfolios of unsophisticated clients. In the era of web 2.0, dividendes.ch is proof of this! Information for those looking for it is available.
3. There will be a 3rd category (which already exists but is only aimed at one category of traders) which will be the discount bank, the 'Easy Bank', à la 'Swissquote' (their recent acquisition of MIG is not a coincidence in this sense, even if MIG is in a different activity). Swissquote is not so discount, but I expect new arrivals.

I would view this development in a positive light, especially since consumer protection associations will be looking at the 2nd category, which will only be able to play this little game with delicacy.

The first signs of what I predict are already being felt: my very subjective feeling is that the arrogant patina of the bankers is starting to crack.

On the other hand, a scenario could come to thwart this, a scenario brought by those who are trying to bring the Swiss financial center to its knees, namely our European neighbors. Indeed, even if the 'tax-free' customer base is important (in the 25% as mentioned above), there is a rate (not yet estimable) of these customers who declare... but remain in their Swiss bank! Here again the reasons are multiple and make us think of the glorious periods of the Cold War:

• Neutrality of Switzerland
• Confidence in a functioning banking system (read: in my home country of France, Belgium, Germany, I have less confidence)
• No confidence in its indigenous political and economic system and in the incessant changes of laws and rules, the nosy state

If this state of affairs is confirmed, will it reverse the trend towards more openness and transparency? I don't think so, it might slow it down. But we have a wave of societal funds which, for better or worse, is pushing towards more transparency. Bankers will not escape it.