At a recent executive roundtable in Zurich, a senior leader from a major Swiss retail bank shared something that stopped the conversation. Roughly one in five of their customers still does not interact with the bank digitally. Not occasionally digital. Not partly digital. Not at all. They come to branches. They call. They use paper. And they trust the bank precisely because it still lets them do that.
For me and many others, the reality served as a wake-up call since, in the process of figuring out how to move forward with our digital operations, we may have overlooked the fact that a large number of consumers are not on the same path.
In the same room, someone else noted that their Gen Z customers will leave without hesitation if the mobile experience is not seamless, instant, and frictionless. No branch. No phone. No second chances.
Both statements are true. Both describe the same bank. And most CIOs and CDOs in financial services, retail, and public sector organizations are sitting inside exactly this tension right now, without a clear framework for how to resolve it.
The Numbers Make It Uncomfortable
This is not a Swiss-specific problem, but Switzerland feels it more acutely than most markets. Deloitte‘s Digital Banking Maturity Study released in March 2025 shows that Swiss retail banks have fallen from 18th place in global digital rankings in 2020 to 27th, with a digital maturity score of 39 points, below the global average of 41 and far behind the digital frontrunners who score above 60.
At the same time, 73% of Swiss residents now use online banking, significantly above the EU average of 55%, while mobile banking adoption jumps to 65% among young adults aged 18 to 25. That gap between the digital majority and the non-digital minority is not closing on its own. It is widening, and the economics of serving both groups simultaneously are getting harder to justify according to Easy Global Banking.
On the Gen Z side, the data is equally clear. Gen Z customers are three times more likely to switch banks if their digital needs are not met. Research from Mastercard shows that Gen Z switches banks two to three times more often than their parents and four times more often than their grandparents.
They do not complain. They do not write letters. They simply leave, and they take their long-term value with them.
A BearingPoint survey of Swiss banking clients in 2025 found that while 92% report satisfaction with their bank’s digital offering, 26% have already experienced or been exposed to cyber fraud or attempted fraud linked to their bank, and concerns about hacking and data breaches remain a top concern for 16% of respondents. Trust, in other words, cuts both ways. The older customer trusts the branch due to a general distrust of digital services. The younger customer trusts the app but distrusts any friction that makes it feel less than instant.
The Strategic Question CIOs Are Avoiding
Most organizations do not consciously choose between these two groups. They are trying to serve both, absorbing the cost of dual-channel infrastructure and calling it an “omnichannel strategy.” That is not a strategy. It is deferred decision-making dressed up in language that sounds deliberate.
The real question is this: what is the actual cost of serving each segment, what is their lifetime value, and at what point does the math force a decision?
The Strategy& Swiss Retail Banking Monitor 2025 found that only a handful of banks managed to reduce their operating costs per customer from 2023 to 2024, while the Swiss branch network is rationalizing at a steady rate of 1% to 2% per year and the overall cost-income ratio across Swiss retail banks rose 2% year-on-year to 52%. The branches serving non-digital customers are not cheap to maintain. Neither is building and sustaining a best-in-class mobile platform that retains Gen Z. Doing both at the same scale indefinitely is not financially neutral.
EY‘s research on the future of Swiss retail banking to 2035 concludes that the balance between cost efficiency and outstanding customer service will increasingly become the formula for success and that implementing all customer preferences is expensive, especially due to outdated and convoluted IT infrastructures.
A Framework for the Decision
Before a CIO or CDO can recommend a path, the organization needs to answer five questions honestly.
- What is the actual cost to serve each segment? Not the blended average. The real per-customer cost of a branch-dependent client versus a fully digital one. In most Swiss retail banks, the cost difference is between three and five times higher for non-digital customers. Know your number.
- What is the revenue and lifetime value profile of each group? An older non-digital customer may hold a mortgage, savings products, and investment accounts accumulated over decades. A Gen Z customer may hold a current account and nothing else today but represents 40 years of future product potential. The revenue picture is not as simple as the cost picture.
- What is the migration potential of the non-digital segment? Not everyone who does not use digital banking refuses to. Some have simply never been shown how, or never had a reason to try. A structured migration program with in-branch digital onboarding support, simplified interfaces, and human backup can convert a meaningful portion of this group within 18 to 24 months. Others will not convert regardless of what you offer. Know the difference.
- What does your competitive position depend on? If your brand is built on proximity, trust, and human service for a regional customer base, abandoning the non-digital segment carries reputational risk that the cost savings may not offset. If your brand is positioning for growth with younger urban professionals, the calculus is different.
- What are the regulatory and social obligations in your sector? In Switzerland, certain public sector organizations and cantonal banks carry an implicit obligation of access that private institutions do not. This is not just a business question. It is sometimes a mandate.
Three Strategic Positions, Not Two
Most organizations frame this as a binary: go digital-first or maintain the branch. There is a third position that works for specific contexts.
Position 1: Managed migration. Serve both segments today, but invest in actively migrating the non-digital group toward digital. Assisted onboarding, simplified tools, and time-limited branch support are some of the ideas to implement. Set a three-year target for migration rate and measure it quarterly. This works for organizations where the non-digital segment has high lifetime value and real migration potential.
Position 2: Segment specialization. Accept the fact that you serve distinct segments and go back and design separate service models for each with clear cost accountability. Stop pretending they share the same infrastructure. Assign ownership, set budgets, and evaluate each on its terms. This works for larger organizations with the scale to sustain two genuine operating models.
Position 3: Deliberate exit from one segment. This is rarely said out loud; it is always whispered, but some organizations will rationally decide that the economics of one segment no longer justify the investment. A digital-native challenger bank should not be spending resources on branch infrastructure. A regional cantonal bank with a 70-plus average customer age should not be optimizing for Gen Z acquisition at the expense of its core base. Know who you are.
What This Means for the CIO
The technology decisions follow the strategic position, not the other way around. Too many digital transformation programs are built around platform choices before the business has decided which customers it is actually trying to serve.
If your organization has not answered the five questions above, the architecture decisions you are making today are built on an unstated assumption. That assumption may be right. But you should know what it is.
This connects directly to a broader point about how digital transformation decisions get made inside organizations. In my piece on why IT operations must become a resilience engine, I argued that the CIO’s role is no longer to keep systems running but to protect the organization’s ability to adapt.
Choosing which customers to serve, and designing systems that actually fit that choice, is exactly the CIO’s job.
The two customers in your base are not a technology problem. They are a strategic clarity problem. Solve that first, and the architecture becomes obvious.
If questions like this sit at the center of where your organization is right now, these are themes I explore in depth in Life in the Digital Bubble, alongside broader perspectives on how technology is reshaping decisions, trust, and the future of organizations. More perspectives on digital strategy and leadership are across the Insights section of this site.