What Causes Profitability?

August 12, 2014
/   Spotlight

Digital Insight proves that digital bankers actually drive increase engagement and profitability with their financial institution.

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Cause and Effect: If you build it, will they come?

/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Platform Shift in the Making

February 13, 2013
/   Insights

What does the banking industry as a whole have to do with Amazon, Microsoft and Apple? Just about nothing—and down the road, it may turn into a major problem (if it isn’t already). Consider...

Infographic: How to Spot a Fake Check

March 8, 2013
/   Insights

The team over at TROY pulled together an infographic on how to spot a fraudulent check. With more consumers using remote deposit capture to upload and deposit checks through their smartphones, it’s important to...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Reserve Banking: The New Radical Idea

June 5, 2014
/   Insights

Banking is by nature a very conservative industry. That’s why the current buzz over ‘reserve banking’ is so interesting. Even the term seems innocuous, but the scenario it proposes is nothing short of revolutionary....

Financial Literacy Month: How are you celebrating?

March 22, 2013
/   Insights

With April approaching, it’s almost time to kick off Financial Literacy Month! Strongly supported by the United States Congress and the Financial Literacy and Education Commission, Financial Literacy Month aims to promote the importance...

Here’s our version of the tree-falling-in-the-forest question: If the world of banking went through a massive change at the beginning of this year, and absolutely no one seemed to notice, then did anything really change?

The U.S. government had previously set a deadline of December 31, 2013, for Swiss banks to stop being so secretive. More specifically, regulators had warned financial institutions in that picturesque nation to accept new conditions in order to gain immunity from prosecution. Those conditions included nudging those banks to in turn nudge their clients into compliance. And apparently, quite a few of them have.

It’s not clear just how many of those banks have done what they’ve been told to do—these are Swiss banks, after all, and confidentiality is their stock in trade. But it’s being reported that perhaps 40 of the banks covered by the agreement—out of some 300—have already agreed to turn over client information in exchange for escaping prosecution.

In a way, this is just another step in the always painful negotiations between regulators and financial services corporations, and we’ve all seen a raft of settlements in the past few years—big fines paid by institutions, no jail time for individuals. But it’s also the end of an era.

Swiss banks have long had a hold on the public imagination. They represent great wealth, often obtained under shady circumstances, financing an international and intriguing lifestyle. These secret accounts have fueled countless thrillers and blockbusters, not to mention some very real escapades and tragedies, from drug wars to terrorist attacks. The reality is that the vast majority of Swiss banking clients made their money quite legally and want nothing more than to shield those assets from creditors and auditors, but in the end that doesn’t matter. Banking secrecy is more Swiss than chocolate, clocks and cheese. And perhaps inevitably, it’s ending—not with a bang but the proverbial whimper.

These confidential practices may seem like they’ve been around forever, but bank secrecy was only codified in Switzerland in 1934. The privacy laws are strictly enforced, prohibiting the sharing of information with just about anyone, including foreign governments. There were some checks and balances put in place, to be sure, but even subpoenas issued by Swiss magistrates sometimes came up short. Of course, as these institutions and their code of confidentiality—symbolized by a mysterious account number—became better known, critics increasingly charged that helped lay the foundation for underground economies and money laundering

In the last few years, we’ve seen some chinks in the armor. Early in 2009, the Swiss government officially abandoned the distinction between tax fraud and tax evasion when dealing with foreign clients—a minor change with major implications. In the same year, Swiss banking giant UBS ponied up a $780 million settlement with U.S. regulators. The government has also signed numerous treaties to avoid being labeled a non-compliant tax jurisdiction.

The last nail in the coffin was pounded home in October of last year, when the Swiss government said it would sign an official agreement that, if approved by the national parliament, will bring its confidentiality practices more in line those in place elsewhere. This was seen in the country as the “end of banking secrecy.” That’s bad news for a sector that accounts for up to 10% of the country’s gross national product.

It’s easy to see how the rash of investigations, prosecutions and convictions have taken their toll on this mysterious business. It’s also easy to see that banking itself is very different from what it used to be—every change from growing institutions in developing nations to the online banking and technological advancements have radically transformed the industry. The bastions of old were destined to fall, and that’s why it’s not a surprise that this long-venerated practice is fading without much notice.

Besides, the notion of secrecy itself now seems quaint. In the era of NSA snooping, data hacking, social media oversharing and reality show posturing, nothing seems private anymore. That may be the real change; let’s hope it’s a good thing.



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Brad Strothkamp


James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.