COVID-19 as catalyst for digitalisation and implications for SNB There are two trends of particular relevance to the SNB that I would like to highlight here. The first, most visible move towards a digital economy is the changing payments landscape, with an increasing use of mobile payments. A second apparent trend is big data and automation – particularly involving artificial intelligence. In addition to these two trends, cyber risk is also growing. Let me start with the changing payments landscape. Changing payments landscape The pandemic has boosted online shopping and contactless retail payments. Because of the measures to reduce interpersonal contact, such as shop closures and limited shopping hours, e-commerce has gained in importance. While cash remains important in Switzerland, the use of cashless payment methods has increased. The SNB conducted a survey on payment methods in the autumn of 2020. This will give us more insight into these trends. The details of the survey will be published this summer. Monitoring changing payment habits is important for the SNB because facilitating and securing cashless payments is one of its statutory tasks. Since the creation of the Swiss Interbank Clearing (SIC) payment system, the SNB has fulfilled its mandate as system manager and commissioning party of the SIC system. The SIC system – also referred to as the Page 5/10  ‘strong core’ of the Swiss payments ecosystem – is the central payment system for both interbank and retail payments in Swiss francs.

Page 10/10  COVID-19, financial markets and digital transformation Andréa M. Maechler, Member of the Governing Board Thomas Moser, Alternate Member of the Governing Board Swiss National Bank Virtual Money Market Event, 15 April 2021  Chart 1  Sources: SECO, Thomson Reuters, SNB  Output plummeted within weeks of outbreak of pandemic  2  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Chart 2  Sources: Bloomberg, SNB  Global equity markets dropped 30% and more in a matter of weeks  3  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Chart 3  Sources: Bloomberg, SNB  In mid-March, yields on government bonds spiked  4  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Chart 4  *  5  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Sources: Bloomberg, SNB  SNB intervened in foreign exchange market to stem appreciation pressures on Swiss franc  Chart 5  Sources: Bloomberg, SNB  Deterioration in USD funding markets led to increase in USD swap basis  6  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Chart 6  Sources: JANUS, SNB  Loans reached smaller firms, which are particularly vulnerable during a crisis  7  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Chart 7  Sources: SNB Banking Operations  While online payments increased in spring 2020, stationary card payments fell by more than 20% compared to 2019  8  15/04/2021 COVID-19, financial markets and digital transformation | Andréa M. Maechler and Thomas Moser | © Swiss National Bank