The market power of the central Swiss cantonal banks in the mortgage business is deceptive

The state banks have grown at the expense of the big banks in recent years. But digital platforms could really stir up the local mortgage market.

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At least every second mortgage in Central Switzerland is granted by the cantonal banks. In Obwalden, for example, it is even 65 percent. At the same time, the big banks UBS and Credit Suisse have lost market share in the mortgage business in Central Switzerland – with the exception of the Canton of Zug – over the past 16 years. This is shown by a new study by the University of Lucerne.

The cantonal banks benefited from the tarnished image of the big banks and did good business for years. While UBS and Credit Suisse licked their wounds, the state banks plowed the lucrative clientele of homeowners. In recent years, the safe haven has mostly been called either the Kantonalbank or the Raiffeisenbank.

However, it would be wrong for the cantonal banks to rest on this success. Because most of the customers fell into their laps in the wake of the financial crisis. And the big banks are now fighting back with concentrated force. They are investing millions in digital mortgage platforms with which they want to bring lost customers back on board. Because such offers can be launched across Switzerland, they have the potential to shake up the local mortgage market. If you believe the banking experts, the future belongs to such platforms. If they don’t invest too, cantonal banks could soon fall behind.