ZURICH: An anonymous tip to Dutch authorities on thousands of suspicious accounts at Credit Suisse could hardly have come at a worse time for Switzerland and its banks.
The information that triggered raids in five countries raises new doubts about the effectiveness of Switzerland’s efforts to shed its decades-old reputation as one of the world’s major tax havens.
“It is a wake-up call not only for the banking community but also for (the) authorities,” said Mark Pieth, an anti-corruption expert and criminal law professor at the University of Basel.
“Instead of really just being angry at others they should ask, have we really been zealous enough?”
Switzerland is among the countries that signed up to a global data-sharing program led by the Organization for Economic Co-operation and Development (OECD), known as the Automatic Exchange of Information (AEI), which was designed to root out tax dodgers.
Swiss banks, having paid more than $5 billion to settle allegations of helping wealthy Americans evade taxes, have trumpeted their reformed ways, publicly encouraging clients to sign up to government programs allowing them to declare untaxed assets.
But last week’s raids on Credit Suisse’s offices in London, Paris and Amsterdam as part of a coordinated investigation in five countries show Switzerland still has a way to go to break with its past.
It is a wake-up call for financial markets as well.
“People really thought that, with the upcoming AEI and the cleanup of the European client portfolio completed, this stuff should not be an issue anymore,” Andreas Venditti, a banking analyst at Vontobel, said. “Now the market seems to be confused about what to think.”
Mark Branson, head of Swiss financial watchdog FINMA, said last week’s news was unwelcome at a time when Switzerland is presenting itself as a reformed financial center whose selling point is stability and reliability rather than tax perks.
“These headlines will not vanish overnight although the business model has fundamentally changed,” said Branson, speaking to reporters on Tuesday.
Another sign that Switzerland has to work harder to improve its reputation was the apparently deliberate efforts by Eurojust, the EU judicial agency which helped coordinate last week’s raids, to keep Swiss prosecutors out of the loop on enforcement actions.
Switzerland’s Office of the Attorney General on Friday demanded a written explanation for the snub.
In the new investigation, raids began on Thursday in the Netherlands, Britain, Germany, France and Australia, with visits also made at three of Credit Suisse’s offices. This followed a tip-off to Dutch prosecutors about 55,000 “suspect accounts.”
One of the big questions is how many of the accounts represent existing client relationships at Credit Suisse, Switzerland’s second-biggest bank, and how many are legacy accounts from when Swiss banking secrecy shielded customers’ money from tax authorities.
Iqbal Khan, the head of Credit Suisse’s International Wealth Management division, said in an interview he did not know where the 55,000 figure referred to by the Dutch office for financial crimes prosecution had come from as the bank had fewer accounts than that for all of Europe.
Khan, who is responsible for Credit Suisse’s private banking operations outside of Switzerland and Asia Pacific, said it was not certain if existing clients would be implicated.
Branson said FINMA had been in contact with Credit Suisse about the raids but was not in a position to say what portion of the case related to old accounts.
One thing that does seem certain is legal and regulatory issues are increasingly considered as a cost of investing in Swiss private banks.
Moritz Baumann, a bank analyst and client adviser at Swiss wealth manager Albin Kistler, said: “The fact is that legal issues are practically part of doing business as a bank.”
Credit Suisse scandal threatens Swiss efforts to clean up reputation
Credit Suisse scandal threatens Swiss efforts to clean up reputation
RLC Global Forum highlights role of Saudi youth in retail digital shift
RIYADH: Saudi Arabia’s young and highly digital population is reshaping how the Kingdom’s retail sector adopts new technologies and artificial intelligence, advancing faster than many global competitors, industry leaders told Arab News.
Speaking on the sidelines of the RLC Global Forum in Riyadh, executives told Arab News that the intersection of a youthful population and strong investment in AI is driving a shift in the industry’s priorities.
From understanding consumer behavior to leveraging the Kingdom’s growing status as a global AI leader, Saudi Arabia is becoming as a unique destination for the retail sector to thrive, learn, and evolve in the digital sphere.
Abdullah Al-Tamimi, CEO of commercial real estate company Hamat Holding, told Arab News that the firm is keen to analyze and understand consumer behavior, with a particular focus on the younger generation as a key part of that insight.
“Actually, it’s a big part of our day-to-day operation,” he said, adding that the company invests heavily in understanding customer needs and behavior and works to correct any missteps.
Al-Tamimi emphasized paying close attention to small details, noting that younger consumers are especially sensitive to the overall experience and “deserve that we work around the clock in order to improve it.”
He added that this focus “can be a competitive advantage for Saudi Arabia as well.”
Al-Tamimi said that as the younger generation grows accustomed to new technology shaping retail customer experiences, Hamat Holding is leveraging AI to enhance them further.
“We started a couple of initiatives improving digitalization,” he said, adding that the company sees digital tools as a way to enhance its work by automating day-to-day operations and allowing teams to focus on bigger-picture and more complex tasks.
While the firm has expanded its use of technology, he stressed it has not replaced human workers, emphasizing the continued importance of human capital for creativity and interaction. “AI is a big part of our strategy,” Al-Tamimi added.
Amit Keswani Manghnani, chief omnichannel and AI officer at luxury goods retailer and distributor Chalhoub Group, told Arab News that bridging a younger customer base with continuous digital development is key to advancing the Kingdom’s retail strategies.
On Saudi Arabia’s demographics, he said: “We look at 2030 as really building products which serve especially the younger population, which is growing and very digitally savvy.”
Manghnani underscored the unique characteristics of the Kingdom’s retail market as a tool for developing effective products and customer experiences.
“So it’s very digitally savvy, much more than in other markets,” he said, noting that e-commerce penetration is rising not only through online purchases but also via digital catalogs that drive in-store visits.
Manghnani said investment is focused on making products more digitally accessible and easier to use, while strengthening customer service to meet the expectations of what he described as a demanding but welcome consumer base. “Service excellence, digital — all these things together are how we are tapping into the younger population, which again is extremely savvy.”
Manghnani reinforced Al-Tamimi’s point that the Kingdom holds a competitive advantage, citing the speed at which its retail and technology industries are aligning.
“As a market, we’re tending to see the adoption of digital,” he said, referring to AI, data and other forms of digital interaction, adding that these tools are increasingly being combined.
He noted that this market is moving “much quicker than the other markets.”
The two-day RLC Global Forum brought together more than 2,000 global leaders, policymakers, and innovators from over 40 countries over the two-day event to define the next chapter of growth across retail, consumer, and lifestyle industries.
