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Impact of Swiss finance sector on country’s GDP waning

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Switzerland’s finance industry: a little less important than a decade ago, but still a big plank of the economy. Keystone / Gian Ehrenzeller

The contribution of Switzerland’s finance industry to the country’s gross domestic product (GDP) has decreased over the past ten years.

The share of GDP accounted for by financial and insurance services was 9% last year, down from 10% in 2011, the State Secretariat for International Finance (SIF) said in a report published on Wednesday.

By comparison, the size of the financial sector in Luxembourg is 25.1% of GDP. In Singapore it’s 13.8%, in the United States 8.9%, and in Britain 8.2%, the SIF wrote.

The number of employees in the Swiss finance sector dropped from around 216,400 in 2011 to 211,605 in 2021, and now account for 5.2% of the overall workforce.

Fewer banks

The total number of banks declined from 320 to 243, with private banks and foreign-controlled banks recording the biggest decrease.

The development reflects the impact of the structural change in wealth management for foreign assets, according to the SIF.

The four main Swiss banking institutions meanwhile accounted for 45% of the entire balance sheet totals in 2020.

Fintech boost

Latest figures also show Switzerland becoming a global hub for start-ups that rely on blockchain technology, mainly in the fintech sector.

The number of such companies climbed from 842 in 2019 to 1,128 in 2021, and accounted for just over 6,000 employees.

Finally, total capital investments of Swiss insurers increased to CHF579.5 billion ($611.4 billion) in 2020 from CHF490.6 billion in 2010, the SIF reported.

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