Business models, compliance costs and consolidation

Five ways to earn a living as a bank in Lugano

The banks described in the preceding sections can be grouped by the way they earn their income. Five business models dominate the Lugano market today, and most banks combine two or more of them.

The first is domestic retail and commercial banking: mortgages, savings, payments and lending to small and medium-sized enterprises in Ticino. BancaStato, Raiffeisen, UBS and BPS (Suisse) are the main participants. The model depends on the cantonal real estate market and on interest margins, which were compressed during the years of negative rates from 2015 to 2022, widened sharply in 2023 and narrowed again after the Swiss National Bank's rate cuts of 2024 and 2025. Its importance is visible in the mortgage series of Table 3, which grew from CHF 12.7 billion in 1990 to CHF 57.0 billion in 2024.¹

The second is private banking for Italian and other international clients. After the tax amnesties and the voluntary disclosure programme, the Italian client in Lugano holds declared assets and expects his Swiss bank to deliver the documentation that his Italian tax return requires. The details of Italian monitoring obligations, the quadro RW of the tax return and the tax on foreign financial assets (IVAFE), are treated in Chapter G.IV. For the bank the shift means that the value proposition has changed from discretion to service: multi-currency custody, access to Swiss and international investment products, Lombard credit against securities, and reliable reporting in Italian. Banks that combine Italian-language advice with a Swiss booking centre and a multi-booking capability, such as BG Suisse, build their strategy on exactly this demand.²

The third is the custody of assets managed by independent asset managers and fiduciaries, a business described from the managers' side in Chapter E.III. Lugano has an unusually dense population of independent asset managers and fiduciaries, many of them founded by former bank employees during the contraction after 2009. Since the entry into force of the Financial Institutions Act (FinIA) on 1 January 2020 these managers require a licence from FINMA and are supervised by a supervisory organization.³ They need custodian banks that offer external asset manager agreements, electronic data feeds, fair custody fees and stable access to clients. For many smaller Lugano banks, the external asset managers have become the most important source of new assets.

The fourth is consumer finance, cards and payments, where Cornèr Banca's card business is the outstanding Ticino example of a national business run from Lugano.⁴ The fifth is securities trading, brokerage and trade finance, which includes the stock exchange banks of the cantonal statistics, the online brokerage of Swissquote, the fixed income brokerage of firms such as Banca Zarattini and the financing of the commodity trading companies of the Lugano region. USTAT counted 114 core commodity trading enterprises in Ticino in 2023, with 873 employees, about 11.7 per cent of the Swiss total of such enterprises against 33.7 per cent for Geneva.⁵ Trade finance is treated in Chapter G.I and the trading houses in Part F.

Notes

1. USTAT, 12 Denaro e banche (March 2026, above), T. 12.5. The description of the interest rate cycle is based on the Swiss National Bank's policy decisions (negative rates from January 2015 to September 2022; rate cuts from March 2024), not separately verified for this chapter. ↩
2. finews.ch (3 August 2024, above). ↩
3. Federal Act on Financial Institutions of 15 June 2018 (Financial Institutions Act, FinIA), SR 954.1, in force since 1 January 2020, with a transitional period for existing asset managers. See Chapter E.III. ↩
4. finews.ch (Cornèr 2023, above). ↩
5. USTAT, 12 Denaro e banche (March 2026, above), T. 12.6 (2023: 114 enterprises, 873 employees, 812.8 FTE in core commodity trading activities; Ticino 11.7 per cent and Geneva 33.7 per cent of Swiss enterprises). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.