Swiss Abroad see red over bank account treatment

UBS, Credit Suisse and Raiffeisen didn't respond to the OSA's questions about account management for the Swiss abroad Reuters

Swiss citizens who live abroad are finding it increasingly hard to open – or keep – bank accounts in Switzerland. While banks treat them as foreigners, the Organisation of the Swiss Abroad (OSA) acts in their interests but receives hardly any support.

“Just imagine – you’ve set up an account for a grandchild containing CHF1,000 ($995), but the fees burn it all up in less than two years. That can’t be right!” Roland Rino Büchel, a parliamentarian from the rightwing Swiss People’s Party and an OSA board member, is angry.

The problem is that since the financial crisis of 2008 and the radical changes in the US banking system, regulation of the financial sector has seriously increased. In 2017, the automatic exchange of information (AIA) will be introduced. All this results in higher costs, which the banks pass onto their foreign clientele – including the Swiss abroad.

The Organisation of the Swiss AbroadExternal link has conducted, for the second time, a survey of Swiss banks on conditions for Swiss abroad who have an account or who want to open one. The results are sobering.

“It remains hard for Swiss abroad to open an account in Switzerland,” says OSA director Sarah Mastantuoni.

“Almost everywhere you have to deal with the bank in person, and not everyone can afford to travel to Switzerland to open an account. When the AIA enters into force next year, the situation with the charges isn’t going to get any better. Almost all the banks have told us they’re going to raise charges.”

But there will be a couple of positive cases, she said. “PostFinance, Swissquote and a few cantonal banks – such as in Jura and Valais – as well as the Valiant Bank are categorically open to Swiss abroad.”

Too painful

That’s all well and good, but PostFinance, a daughter company of the government-owned Swiss Post, has just told its customers outside Switzerland that in 2017 the monthly charge per private account will rise from CHF15 to CHF25.

“In order to justify CHF300 a year, the bank adviser would have to come and see me in France personally …” grumbled one participant in an online discussion. “That’s beyond the pain threshold,” said another.

One customer in France, who had to live off a reduced pension, told swissinfo.ch that the higher charges “cut her to the quick”.

Mastantuoni said the OSA had approached the president of the Post, since most of the time it’s a question of savings accounts with little movement.

“If you haven’t got much in the account and every month you have to pay CHF25, you won’t have much left at the end of the year,” she said, adding that, to date, the Post had not responded to OSA’s questions.

For Roland Rino Büchel, increasing the charges is basically a “cold way” of getting rid of the Swiss abroad. “The banks can’t turn them away, but hiking the charges like that ultimately means they can no longer afford [to keep an account] – or no longer want to,” he said.

Dead end

Various parliamentary motions have so far failed to improve the situation. The Council of the Swiss Abroad, for example, demanded the government create conditions for all Swiss abroad to be able to open an account at PostFinance in Switzerland.

Mastantuoni said the Environment, Transport, Energy and Communications ministry had announced it would “continue where possible to work to keep PostFinance open to Swiss abroad, in particular for payment transactions”.

Büchel, who has fought in parliament to improve the situation for Swiss abroad, admits they’re currently at a dead end in this matter.

Last year he demanded in a bill that all “system-relevant” banks, i.e. those that are considered too big to fail, must enable all Swiss citizens – no matter where they live – to have access to a bank account in Switzerland. The bill is still to appear before parliament, but the cabinet has recommended it be rejected.

In addition, the Senate is set to discuss a demand by Konrad Graber from the centre-right Christian Democratic Party for PostFinance, among others, to be obliged to open and manage a transaction account, including for the Swiss abroad. The cabinet and the Senate both support this; the House of Representatives is yet to discuss it.

‘Fiscal honesty’

Swiss citizens living abroad have already fired off countless complaints to various bodies about discrimination when it comes to Swiss banks accounts.

“We too have registered such cases,” acknowledges Rolf Wüest, deputy Swiss banking ombudsman, who points to the institution’s 2014 annual reportExternal link.

“The Swiss Financial Market Supervisory Authority (FINMA) has asked banks to analyse the legal and reputational risks they face in their cross-border activities and take suitable action to mitigate these,” it said.

“The banks are therefore seeking to enquire into the fiscal honesty of their customers, using different methods, and to close business relationships where no satisfactory answers have been provided to the relevant questions. Measures of this sort taken by the banks, and particularly the deadlines given to customers, again resulted in various complaints, notably about the restrictions on closure options such as a refusal to settle in cash.”

But how high the charges will be is left to the freedom of the market and individual banks’ business policies, over which the banking ombudsman has no influence, according to Wüest.

“The banking ombudsman can only intervene if a complaint is registered for actual misconduct by the bank towards a client, for example if a bank retroactively raises fees,” he said.

Costs and risks

Thomas Sutter, head of communication at the Swiss Bankers’ Association, agrees, saying the question of fees is ultimately left to individual banks.

“The costs and risks have risen enormously over the past ten years. This is regrettable for individual clients, but there are still enough banks that accept the Swiss abroad,” he said.

So these citizens still have options – albeit limited ones – to keep money in Swiss banks, he added.

“The market still plays a role. And wherever there’s a market, there’ll be people offering a service.” 

What have been your experiences of opening a Swiss bank account?

Translated from German by Thomas Stephens