Interview

PostFinance welcomes interest rate turnaround and achieves stable result

In the normalized interest rate environment, PostFinance CEO Hansruedi Köng sees potential for significantly improved profitability in the medium term. With its additional payment options, the PostFinance Card launched in 2022 improves coverage of customer requirements and behaviour. And as digitization continues its advance, further developments such as the QR-bill are needed, but also a sensible implementation of the universal service obligation from 2030.

Hansruedi Köng, 2022 was a turbulent year for the financial sector. How did PostFinance fare?

I’m satisfied with the result. Despite difficult market conditions, we have remained firmly on track. Thanks to the normalized interest rate environment, we were able to free our customers from the unpopular customer asset fees, the so-called negative interest rates, in October. In addition, we have continuously optimized our product range and shown that we are bold and innovative.

Since September 2022, the policy rate has again been positive. The period of negative interest rates is now behind us. What was the significance of this step towards “normality” for PostFinance?

In the medium term, the return to positive interest rates is a financial blessing for PostFinance, and we very much welcome the turn towards a positive interest rate environment – which is also in the interest of our customers. In the short term, the positive yields on investment do not yet fully offset the loss of income from negative interest rates in the interbank business. However, the gradual normalization of interest margins – combined with increased revenue in the interest differential business – will provide PostFinance with the potential to significantly improve profitability from 2024.

PostFinance has launched a new PostFinance Card combined with Debit Mastercard. How does this benefit customers?

We have been driving the development of convenient and secure cashless payment solutions for many years. The new PostFinance Card can now be used to make payments practically anywhere in Switzerland and abroad. The yellow card can also be used for online orders from domestic and international e-commerce providers from home and on the go. This is our response to customer needs and the growing tendency to replace cash with electronic payment methods.

The QR-bill represents a further step in the digitization process. How is the number of face-to-face transactions over the counter developing?

The introduction of the QR-bill allows for the ongoing digitization of business processes among our business customers, while also implementing the legal requirements aimed at combating money laundering and the financing of terrorism. This means that customers who deposit cash can be better identified. It also means that the confirmations of beneficial ownership required by law can be carried out more easily. It has long been clear to us that this technological development will accelerate the long-standing trend towards declining cash payments at the counter. This trend will continue, and the challenge of financing this expensive physical counter infrastructure will therefore also continue to grow.

Politicians are discussing the future of Swiss Post’s universal service obligation and the associated mandate to provide payment transaction services. What is your vision for the universal service obligation from 2030?

The kind of universal service for payment transactions that Switzerland wants to have in the future is a political question. The Federal Council is seeking to set out concrete proposals by summer 2023. Swiss Post and PostFinance welcome this, are happy to participate in the work and are providing a basis to facilitate the political decision. I would like to see a solution that takes the needs of businesses and the general public into account, while also being technically feasible and financially viable.