The SEPA credit transfer and SEPA direct debit schemes replaced all domestic payment schemes in the euro area, using fully interoperable global standards. Catering for innovation In the current age of rapid technological progress, it is vital to ensure that innovation delivered by banks and non-banks reaches all European citizens. Innovative bespoke national solutions using 1/4  BIS central bankers' speeches  national – or, more frequently, non-European – technology could threaten the integration achieved by the various SEPA schemes. Innovation may start at domestic level, but it should not face barriers preventing pan-European expansion. Thus, national solutions should provide for pan-European reach in their initial design. As these solutions tend to be provided by non-banks or disseminated by local banks on behalf of non-European entities, third-party providers need regulated access to payment accounts. The revised Payment Services Directive (PSD2), which is currently in the process of being implemented, will provide secure and interoperable payment account access and will allow innovative new payment services to be provided in the EU. What we don’t need is integration with non-European countries that runs counter to European standards. While legislation is indispensable for an integrated market and to promote innovation, it is not the only precondition. Cooperation between stakeholders is also essential in order to ensure smooth and harmonised processes throughout the EU. The ECB has brought the market together, initially via the SEPA Council and then via the Euro Retail Payments Board (ERPB).

Nevertheless, despite a clear tendency towards financial market concentration, Switzerland remains a country with a wide network of small banks. Beside the two big banks, Credit Suisse Group and UBS AG, Switzerland counts over 100 regional and savings banks, 24 cantonal banks, 17 private banks and over 140 subsidiaries and branches of foreign banks. Our banking sector is extremely dense with a strong presence in all parts of the country. The insurance sector is the second traditional leg of our financial centre. Our insurance companies have strongly expanded abroad. Here also, open markets and intense competition have led to consolidation and large units. More than 10 years of global de-regulation have left deep and lasting marks not only on the structure of the financial sector, but also on the range of its activities. Reacting to the changing market environment and stiffer international competition, many banks have placed more emphasis on their international business and shifted their activity from balance-sheet to off-balance-sheet transactions. This is true in Switzerland as well. Investment banking and asset management have gained in importance, whereas less lucrative areas, such as domestically-oriented retail banking, have lost part of their attractiveness. In our case, the expansion of the investment banking activities has taken the form of a number of acquisitions in foreign countries, tightening the ties between Switzerland and other financial centres. BIS Review 13/2002  1  The expansion of asset management has been much more domestically generated. Asset management is an area in which Switzerland has been traditionally strong.