Risk-based supervision for a stable financial market

This annual report sets out FINMA’s main areas of focus in 2025: continuing to apply proportionate and risk-based supervision, strengthening supervised institutions’ resilience, early detection of rising risks among supervised institutions and robust measures to protect customers. The annual report highlights the activities and measures implemented by FINMA in executing its supervision and enforcement work.

Notwithstanding the short-term effects of the US tariff shocks, the Swiss financial market was spared any significant upheaval in 2025, even though economic uncertainties increased and both geopolitical and trade-related risks intensified overall. Despite these challenges, the situation of the institutions supervised by FINMA remained largely stable.

Proportionate, risk-based supervision: matching resources to risks

Larger and more complex institutions are subject to stricter requirements and closer monitoring. In 2025, FINMA continued to supervise most intensively those financial market participants at which it identified the biggest risks to financial market stability and client protection. The integration of Credit Suisse into UBS was one of its areas of supervisory focus. FINMA conducted a total of 113 on-site inspections, primarily at large banks, concentrating on the areas with the greatest risks, i.e. anti-money laundering, mortgage lending and cyber risks. It carried out 43 on-site inspections of insurance companies, most of which were at large insurance companies.

Small, well-managed and stable institutions – such as the 56 banks that participate in the small banks regime – once again benefited from regulatory relief and underwent fewer direct inspections compared with larger institutions. Smaller banks that do not participate in the small banks regime are supervised by FINMA in proportion to their size and risks.

Real estate and mortgages, especially in relation to credit default risk and real estate valuation risk, remain among the biggest risks for the Swiss financial centre. FINMA published guidance on this issue in 2025. It summarises the findings of the supervisory activities conducted by FINMA and sets out its expectations regarding mortgage lending.

Effective supervision to strengthen operational resilience

To strengthen the financial centre’s resilience, financial market infrastructures were one of FINMA’s areas of focus. Here, for example, it carried out on-site reviews of the continuation or restoration of critical functions in the event of serious but plausible disruptions within defined disruption tolerances.

In addition, FINMA continued its annual evaluation of the emergency and recovery plans of the systemically important banks within the framework of the “too big to fail” legislation. UBS’s recovery plan met FINMA’s new evaluation criteria for the first time since the takeover of CS and was formally approved. However, among the domestic systemically important banks, PostFinance’s emergency plan was judged by FINMA to be not ready for implementation.

Based on the findings from more intensified supervision, FINMA required the supervised institutions to have robust systems and realistic crisis scenarios in place in information technology, cyber defence and business continuity management. In 2025, it carried out for the first time its own stress tests to evaluate the resilience of Swiss investment funds. Although on the one hand FINMA noted a high level of awareness regarding some aspects of operational resilience at fund management companies and managers of collective assets, on the other hand it also identified recurrent weaknesses in outsourcing and business continuity management. It therefore increased the granularity of its monitoring of organisational structures in its authorisation and supervisory processes regarding cyber security.

Early detection of growing risks

To identify risks faced by supervised institutions earlier and understand market conduct better, FINMA continued to promote data-driven, forward-looking supervision during the year under review. For example, it conducted its first sector-wide data survey in asset management and developed new tools to assess and analyse potential market manipulation.

In addition, FINMA carried out an increased number of “deep dives” at supervised institutions to identify risks early, involving direct interaction with the board, executive management, the compliance and risk structure and internal audit.

Retail banking was an important area of supervisory focus with regard to combating money laundering. FINMA addressed various weaknesses in transaction monitoring during on-site inspections and defined measures to remedy them. It also found that, in individual cases, institutions entered into client relationships that exceeded their risk tolerance and whose risks or economic background were not sufficiently understood. In general, FINMA noted that progress has been made in the banking sector in the preparation and implementation of money laundering risk analyses. Nevertheless, it still identified various shortcomings that needed to be remedied.

To fulfil this enhanced and intensified supervisory activity, FINMA carried out an internal reorganisation in the spring of 2025. This included creating the new Integrated Risk Expertise cross-functional division to support the supervisory departments with integrated risk and data analysis and assist in the FINMA-wide planning and implementation of on-site inspections. The new structure strengthens direct preventive supervision and, by improving internal cooperation, contributes to making FINMA a more efficient authority. The supervised institutions have retained their usual contact persons at FINMA.

Expanded client protection measures

To protect clients, FINMA placed a growing number of asset management firms under intensive supervision owing to various deficiencies, often relating to compliance with conduct rules on suitability. Particularly at smaller institutions in the banking sector, disclosure of conflicts of interest when using their own financial instruments was still inadequate in spite of the statutory transparency rules.

In the supplementary health insurance sector, FINMA was able to ensure that there were only moderate premium adjustments and, in several cases, premium reductions. Further reviews of supplementary health insurers showed that billing practices with service providers has improved across Switzerland, although shortcomings persist in certain regions.

Outlook for the future

The relevant risk landscape for the Swiss financial centre heightened considerably in 2025. FINMA identified nine principal risks for the financial market in its 2025 Risk Monitor. Cyber and ICT risks in particular continued to increase.

To mitigate the growing risks as far as possible, FINMA is asking supervised institutions to strengthen their defences through improved capital reserves, liquidity buffers and appropriate risk management. The PInC report of December 2024 on the CS crisis and the Federal Council’s parameters for amendments to the laws and ordinances aimed at strengthening the too big to fail regime published in June 2025 supported this demand. FINMA explicitly welcomed the measures proposed by the Federal Council in one of its own press releases.

Even more effective supervision will help to further strengthen the financial centre’s resilience to financial and non-financial risks. FINMA as an institution must have the tools it needs for this at its disposal and continue developing as an organisation. This will enable it, for example, to carry out more of its own on-site inspections and reduce its reliance on external auditors.

FINMA expects the expansion of supervision to go hand in hand with further growth in costs. The proposed new resources are consistent with FINMA’s strategic goals for 2025 to 2028. FINMA will also remain relatively lean compared with other authorities.