Finnova and Avaloq remain the two core banking systems used by most retail banks in Switzerland and Liechtenstein. That is the finding of the study "Zukunft der Kernbankensysteme 2026" by the Institut für Finanzdienstleistungen Zug (IFZ), part of the Lucerne University of Applied Sciences and Arts (HSLU), presented on 27 October 2026 in Zurich. In this Swiss core banking market, Finnova equips 63% of the banks surveyed and Avaloq 22%.
What market share do Finnova and Avaloq hold?
The study is based on a survey of banks' IT managers. According to Inside IT, 63 of the 123 IT heads contacted responded, and interviews supplement the questionnaires. The authors are Thomas Fischer and Urs Blattmann, lecturers and project leaders at the IFZ, according to the HSLU presentation page. This is the second edition, following the one in 2023.
| Core banking system | Share of banks in the sample, 2023 study | Share of banks in the sample, 2026 study |
|---|---|---|
| Finnova | 67% | 63% |
| Avaloq | 17% | 22% |
| Temenos | not cited | 3% |
| Finstar | not cited | 2% |
| TCS Bancs | not cited | 2% |
These percentages describe the sample of banks that responded, not the market as a whole. They count institutions, not assets or customers. Nothing indicates that the two editions cover the same banks: Finnova's decline and Avaloq's gain between 2023 and 2026 should therefore be read with caution.
Why does the study speak of a duopoly?
The authors use the word themselves. "The core banking system market of Swiss retail banks remains characterised by a duopoly," they write, as quoted by Inside IT. New providers have not established themselves in Switzerland or Liechtenstein, even though they often come up in debates about future architectures.
This concentration comes at a price for banks, according to the study. "For banks, the high market concentration means a limited choice of realistic alternatives and a strong dependence on their own provider," the authors note.
The case of Temenos, the Swiss banking software vendor, illustrates the gap between the domestic and global markets. It accounts for only 3% of the IFZ sample. Yet its revenue reached $292.8 million in the third quarter of 2026, as 2clics reported when Temenos raised its profit forecast. Its recent contracts include two North American cooperatives: Vancity, in Canada, for its core banking system, and Sound Credit Union for debt collection, both on a SaaS basis.
Are retail banks satisfied with their system?
Yes, but without enthusiasm. "Satisfaction is stable and solid, but rarely enthusiastic," the study sums up, as quoted by Inside IT. For the authors, this satisfaction mainly reflects an appreciation of the systems' stability and reliability.
The strengths remain the same as in 2023: stability, availability, resilience to outages and reliability. However, only a minority of banks perceive active and rapid development of their system by the provider.
What do banks want from banking software?
Interfaces top the list of needs, in 2023 as in 2026. The authors find this "both surprising and disappointing": the need is known, but it is still not being met.
Artificial intelligence (AI) comes second. Banks thus consider it essential for a future-ready core banking system. Yet they say they are "very sceptical" about providers' new offerings in this area, according to the study.
The cloud and modularity, explicitly demanded three years ago, have become a "tacit requirement". The HSLU's presentation of the study also puts the shift from monolithic architectures to modular, service-based approaches at the centre.
Why are banks giving up on migrating?
The willingness to change systems has declined markedly. According to finews.ch, four years ago many banks planned to replace their software in the medium term. Today, around two thirds of them intend to keep their current system in ten years' time.
The cost of a switch partly explains this choice, although the study does not quantify it for each bank. According to finews.ch, the complete development of a core banking system has until now been considered a project of at least ten years. It required investments ranging from several tens to several hundreds of millions.
Editorial view: a two-provider market, a long and costly migration and satisfaction rooted in stability all push towards the status quo. Migrations nonetheless remain possible. The programme of the forum on 27 October 2026 included a case study by Marcel Rüede, Chief Operating Officer of Founders Bank AG, on how to successfully switch core banking systems.
What we don't know yet
- Each provider's weight in assets or customers: the published shares count banks, not their size.
- The real cost of a migration for a Swiss retail bank: only the order of magnitude for a complete development is circulating.
This article does not constitute investment advice.
Sources
- Inside IT: "Zwei Anbieter dominieren die Kernbankensysteme", 30 October 2026
- Hochschule Luzern: "IFZ Forum Bank-IT: Präsentation IFZ Studie Zukunft der Kernbankensysteme", forum of 27 October 2026
- finews.ch: "Schweizer Banken wollen ihre Kernbankensysteme plötzlich behalten", October 2026
