A phase of challenges for Ticino Banking Association

TICINO

This year the Ticino Banking Association (ABT) turns 100. We interview the director Franco Citterio, to understand what challenges the cantonal financial centre faces.

A phase of challenges for Ticino Banking Association
The financial center in Ticino still offers around 10,000 seats. But the pressure on the sector is high. © CdT / Gabriele Putzu

A phase of challenges for Ticino Banking Association

The financial center in Ticino still offers around 10,000 seats. But the pressure on the sector is high. © CdT / Gabriele Putzu

The Ticino Banking Association (ABT) turns 100 in an extremely delicate period. What is the state of health within the square at the moment?

The Ticino financial center, similar to the Swiss and international ones, is going through a period of great changes, mainly due to increasing regulation, digitalization and highly competitive markets. These are structural changes destined to last for years and which will profoundly change the face of the sector in the medium term. Currently in Ticino there are about forty banks and a thousand financial companies that offer around 10,000 skilled and well-paid jobs. Therefore it is still a very important sector for the territory both in economic and fiscal terms.

The coronavirus pandemic has heavily affected the Ticino economy. What effects have you come up against?

The Ticino economy in general and some sectors in particular (trade, tourism, export industry, etc.) suffered a strong and immediate backlash that has left its mark. The immediate intervention of the Confederation and the banks made it possible to at least partially mitigate the risks of financial collapse. After a relatively quiet summer, which allowed for at least a partial recovery, autumn and winter will be a testing ground for calculating the actual consequences of the pandemic on the Ticino economy. Consequently, the banks are worried and are gearing up to face a phase of ‘recovery’ of trade receivables.

There is a lot of talk about the acceleration that the lockdown has had on digitalization processes, which were already underway in the financial world. How does the situation present itself today?

Digitization for the financial sector means technological progress because it allows for leaner work processes and enhancement of functions with high added value. This virtuous process is changing the professional profile of the bank, eliminating the most repetitive jobs in the short term and creating new business opportunities in the medium term.

Many service sector companies, including those in the banking sector, have introduced remote working. To what extent is this model gaining ground also in Ticino, and what are your future predictions in this area?

In general and in the service sector remote working is a modality that has already been present for years and appreciated by both employees and entrepreneurs. The pandemic has accelerated the application of teleworking and also the banking sector. I am convinced that thanks to digitization and IT security, the percentage of distance working will be able to grow significantly in the coming years. Consequently, real estate demand will also undergo significant changes in terms of size and location of work spaces.

A theme that is making a name for itself in the financial sector is that of sustainability. How is the Ticino financial center facing this trend? Are there also training proposals from your association?

The ABT has been following the theme of sustainability for years, together with the other main economic associations and the Canton. Banks have intercepted the value of these principles and generally offer products and services that comply with sustainability standards. In addition, they are at the forefront of the implementation of good practices also in the business environment. In this perspective, our Villa Negroni Study Center offers a series of seminars that address the subject from various points of view and our association has mandated SUPSI to carry out a study through which various aspects of the Corporate Social Responsibility of Ticino banks.

The financial world is characterized by a ten-year trend of mergers and acquisitions. How do you assess the situation at Ticino level? Is there still room for further operations?

Mergers and acquisitions are driven by the need for critical mass and business expansion. In recent months, we have seen an increase in operations which are not limited to large international groups but which also include small and medium-sized institutions. I am convinced that in the next few years we will see a further settlement of the Ticino market, and not only in the banking sector but also in the parabanking sector (management companies, fiduciary companies, etc.).

What effects do all these megatrends have on the employment level of the financial sector in Ticino? Do you think the downward trend in jobs is set to continue?

The decrease in employment in Ticino banks is a phenomenon dictated by various factors, not least by the loss of attractiveness of asset management for international customers. If we can do nothing but adapt to megatrends, my hope is that in terms of tax agreements we will sooner or later arrive at an improvement in access to cross-border markets, especially the Italian one, which remains by far our main market for reference.

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