A clear majority of Swiss retail banks are opting for operational continuity regarding their core banking systems, marking a sharp contrast to the sentiment recorded four years ago. According to a comparison of two surveys conducted by the Institute for Financial Services Zug at the Lucerne University of Applied Sciences and Arts, approximately two-thirds of participating financial institutions now anticipate operating with their current core banking software even in ten years. This proportion has roughly doubled since the previous survey in 2022.
The findings form part of the new study titled Core Banking Systems 2026, which was presented in Zurich and made publicly accessible. The willingness to switch systems was considerably higher four years ago. In 2022, ten percent of surveyed institutes envisioned changing their core banking system by 2027, another 26 percent considered a transition between 2027 and 2029 probable, and an additional 32 percent pointed to the timeframe between 2029 and 2032. In total, roughly 68 percent of banks surveyed at that time expected a potential system change by 2032.
Skepticism toward existing infrastructure carried understandable drivers. While banks valued stability and functional scope, they criticized high costs, outdated technical architectures, and slow development cycles. Monolithic systems, where central functions remain tightly interwoven, were increasingly viewed as barriers to deploying new digital services rapidly. Today, however, banks assess the situation more favorably. Established domestic providers such as Avaloq and Finnova, alongside other market players, have made progress according to the study authors, addressing customer needs more effectively and enhancing transparency in their technological roadmaps.
Meanwhile, anticipated alternatives have largely failed to materialize. Four years ago, core banking systems from European neobanks raised expectations, but entering the Swiss market proved difficult. A central hurdle is known as Helvetization, requiring international solutions to adapt to the regulatory, tax, and operational specifics of the Swiss banking sector. Several potential implementation projects failed due to these requirements.
Nonetheless, study authors Urs Blattmann and Thomas Fischer caution against viewing higher satisfaction as a permanent guarantee for established providers. Generative artificial intelligence could reshape the market fundamentally. Modern tools permit faster analysis, reprogramming, and testing of existing software architectures. Historically, building a core banking system required at least a decade and investments reaching the high tens or hundreds of millions, yet AI challenges this premise.
The authors highlight a case from the railway industry presented at a Swiss Fintechs Innovations event, where a monolithic IT solution from 2008 was replaced within three months using generative AI. Consequently, larger financial institutions might reconsider developing proprietary core systems rather than merely building ancillary applications around existing software. Established providers may leverage AI to accelerate software modernization, while new entrants could also benefit as financial and technological entry barriers decline.
