HomeResearch & Knowledgeback to Homeback to Research & KnowledgeBSI Bank of Switzerland: Victim of growth or perpetrator of a crime?back to

Case Study

BSI Bank of Switzerland: Victim of growth or perpetrator of a crime?

By Salvatore Cantale and Ivy Buche

18 pages

October 2016

Order this case study

Reference: IMD-7-1821

The case is set in May 2016 when the Monetary Authority of Singapore withdrew the merchant banking license of the Singapore branch of Swiss private bank BSI Ltd. The reasons cited were violation of anti-money laundering regulations, pervasive non-compliance and gross misconduct by staff. The closure of the bank was precipitated by an ongoing scandal around its biggest client, 1MDB, a Malaysian sovereign wealth fund spearheaded by the Prime Minister Najib Razak. At the same time, the Swiss Financial Market Supervisory Authority announced criminal proceedings against the BSI group for failure to conduct statutory due diligence on transactions involving hundreds of millions of dollars linked to 1MDB and slapped on a fine of CHF 95 million. The case provides an opportunity to analyze the factors that led to the demise of BSI, one of the oldest banks in Switzerland and the sixth largest in the country. Did the lure of lucrative business persuade it to cross the line in terms of ethics and regulatory requirements? BSI appears to have pursued top-line growth at the expense of compliance. To what extent was the senior management responsible? Could BSI have better managed the balance between risk management and its growth strategy? If so, how?

Learning Objective

To identify the contextual challenges of operating in complex high-growth markets. To understand the role of senior management in maintaining oversight. To recognize the balance between managing risk and compliance in pursuing aggressive targets. To assess the interface between the headquarters and the local subsidiary for functions such as audit, governance and conduct. To understand the global ramifications of a local breach.

Keywords

Private Banking, Money Laundering, Risk Management, Crime, Compliance, Sovereign Wealth Fund, Emerging Market

Settings

BSI Bank of Switzerland, Finance and Insurance, Financial Services, Finance and Insurance, Banking
2005-2016

Type

Published Sources

Available Languages

English

Related material

Teaching note

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Article

Case study: The CEO suffered a breakdown. Now what?

Alex Reinhardt was brought in to turn around a renewable-energy company that had been on the verge of bankruptcy until the German government bailed it out. After he fainted from overwork and burnout and had to take a medical leave, the board appoi...

Corporate Governance Leadership Change Management

By Jean-François Manzoni

in Harvard Business Review

January-February 2025, vol. 103, issue 1

Article

Here’s what we predicted for 2024… how did we do?

Did our predictions for 2024 come true, a turbulent election year, bitcoin and CBDC, COP29 and electric cars, China, EU integration and Euro football

Finance Future Readiness Geopolitics Strategy Sustainability

By Robert Hooijberg, Arturo Bris, David Bach, José Parra Moyano, Michael R. Wade, Julia Binder, Howard H. Yu, Simon J. Evenett, Alyson Meister, Salvatore Cantale and Stefan Michel

in I by IMD

Article

Economic dynamics in Asia: Japan’s revival, China’s challenges, and India’s emergence

Asia's economic landscape 2024 and 2025. Three distinct approaches: Japan's technology-driven revival amid demographic challenges, China's deflation and growth concerns, and India's manufacturing ambitions through foreign investment and strategic ...

Economics Geopolitics

By Nico Luchsinger

in I by IMD

Article

How to get more power at work

You won't be able to understand how power operates in your unique context on your first day in the company, but it's highly achievable after about six months of closely observing the environment. You won't be able to understand how power operates ...

By Jennifer Jordan

in I by IMD

Article

Kinder Morgan: Navigating growth in the digital energy era

David Michels, CFO at Kinder Morgan, a US energy infrastructure company, explores how rapid AI and data center growth have quickly reshaped energy demand

in I by IMD

Article

‘Tis the season to preserve your well-being

Keeping healthy and prioritizing your emotional and physical well-being during Christmas and New Year is important to avoid burnout caused by the stress and pressure of the holiday season.

Workplace Well-Being

By Alyson Meister, Amin Kaboli and Katherine J Armstrong

in I by IMD

Article

Everything you need to know about quantum computing but were afraid to ask

After a few false dawns, we could finally be on the eve of the quantum era – which means organizations need to start thinking about encryption now. Here's what you need to know. After a few false dawns, we could finally be on the eve of the quantu...

By Öykü Işık

in I by IMD

Book Chapter

The strategic imperative

In a world where change is the only constant, the strategic imperative for sustainability is not just a theoretical construct – it’s a call to action. This section of the book delves into the core strategies that will enable businesses to thrive i...

Business Transformation Innovation Strategy

By Julia Katharina Binder and Knut Bjarne Haanaes

in Binder, Julia Katharina (Ed.); Haanaes, Knut Bjarne (Ed.) / Leading the sustainable business transformation: A playbook from IMD, pp. 59-62 / Hoboken: Wiley, 2025

Book

Leading the sustainable business transformation A playbook from IMD

Based on extensive research conducted in the past several years at the International Institute for Management Development in Switzerland (IMD), Leading the Sustainable Business Transformation: A Playbook from IMD helps readers understand why susta...

Business Transformation Sustainability Organizational Design

Edited by Julia Katharina Binder and Knut Bjarne Haanaes

Case study: The CEO suffered a breakdown. Now what?

By Jean-François Manzoni
in Harvard Business Review January-February 2025, vol. 103, issue 1

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Corporate Governance

Leadership

Change Management

Browse all topics

Economic dynamics in Asia: Japan’s revival, China’s challenges, and India’s emergence

By Nico Luchsinger
in I by IMD

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Economics

Geopolitics

Browse all topics

The strategic imperative

By Julia Katharina Binder and Knut Bjarne Haanaes
in Binder, Julia Katharina (Ed.); Haanaes, Knut Bjarne (Ed.) / Leading the sustainable business transformation: A playbook from IMD, pp. 59-62 / Hoboken: Wiley, 2025

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Business Transformation

Innovation

Strategy

Browse all topics

Leading the sustainable business transformation A playbook from IMD

By Julia Katharina Binder and Knut Bjarne Haanaes
Published by Wiley ©2025

Summary