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Swiss Post Prepares To Move Into Online Banking, Brokerage Services

Ulrika Lomas, Tax-news.com, Brussels

23 November 2000


The Swiss national post office, Swiss Post, is reported to be launching an online brokerage platform in 2001 and has applied for a banking licence in order to be able to offer a full range of banking services. Swiss Post currently offers electronic bill payment and direct debit services to two million customers in Switzerland through its Postfinance business unit, which considers banking and broking as logical and profitable additions to its existing services. 'Our clients want to have all these services from one institution,' said a Postfinance spokeswoman.

Having looked at a number of brokerages with a view to a collaboration, Swiss Post has signed an agreement with Banque Cantonale Vaudoise (BCV) to offer the services of its online brokerage, e-SIDER.com, under the Postfinance brand name.

Yves-Claude Aubert, e-SIDER's chief executive officer, said that the agreement provides the online broker with a “huge opportunity,” and potentially represents a considerable threat to other banks. He said: 'If they are able to convert their existing online customers, who are already going to their site and paying their bills and viewing their accounts, it will be big. According to Postfinance, the brokerage services will initially be offered only online, although they may be available through the company's offices in the future.

The proposed banking services would be kept separate from the brokerage side. Postfinance is awaiting approval from the Federal Department of the Environment, Transport, Energy and Communications (UVEK) and if given the go-ahead for a bank licence, the decision will then go to the Parliament and the Swiss public will vote on the issue. According to Mr Aubert, 'There is a big political debate in Switzerland regarding the regulations of a post office switching to a bank.' .

Specifically the debate revolves around the fact that Swiss Post is a state institution, and there are some questions whether it should be able to become a bank. UVEK is reported to be "in the very early stages" of looking at the proposal, and will discuss it with Switzerland’s banks before making recommendations to Parliament, which are expected in January 2001. However, if all goes according to plan, it will still be some time before the Swiss public get access to banking services as it could take around a year before the public vote is held. If approved, the banking services will be available online and through Swiss Post branches.

According to a recent study by JP Morgan Securities in London, there are currently currently one million Internet banking accounts in Switzerland and 100,000 online brokerage clients. Daniel Gresch, an analyst with UBS Warburg, expressed his reservations about the potential success of Swiss Post as a bank and online broker, despite its size. He commented: 'I am not sure whether the margins currently earned in the Swiss market would allow another competitor to come in. For a post office to become a bank, they have to build a product, get in additional specialists, it’s not going to be cheap.'

Most financial institutions in Switzerland are watching Swiss Post closely as it endeavours to enter the banking and brokerage sectors. Postfinance does not share their concerns, saying that the company already has the online customer base which will make the transition much smoother.

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