A report by Bloomberg Businessweek recently revealed that private banks in Switzerland are drying up at an accelerating rate.

Swiss banks have long since held a reputation as being the go-to sector for holding foreign currencies. The primary reason is because Swiss banks are no longer harboring the privacy that used to make them so valuable. New laws and ongoing investigations are cracking down.

A decade ago, Bloomberg wrote an article to that effect, saying, “Switzerland remains the leading offshore money manager, with about a third of the cross-border wealth in the world. And the biggest Swiss banks should weather any difficulties, since they manage money in offices globally, not just Zurich.”

Switzerland currently remains the biggest global hub for offshore wealth, holding 26 percent of it, equaling $2.2 billion. However, according to bankers, consultants, and analysts who spoke to Bloomberg, “A crackdown on bank secrecy and increased regulatory scrutiny may unlock a wave of mergers and acquisitions in the next 12 to 18 months.”

Another notable point in the Bloomberg report include the US investigating on Swiss accounts:

“The U.S. has been investigating Swiss banks and units of foreign banks in the country, including that of London-based HSBC, after UBS AG (UBSN) in 2009 avoided prosecution by admitting it fostered tax evasion and delivering data on about 4,700 accounts of Americans. France and Germany have been searching for tax dodgers using data stolen from Swiss banks and also sharing some of the information with authorities in other European countries.”

With banking secrecy becoming more of an issue, Banks in Switzerland will also need to develop new products and services to attract foreign clients, said Ray Soudah, the founder and chairman of MilleniumAssociates AG.

Lloyds Banking Group Plc, Britain’s biggest mortgage lender, sold its international private-banking business in May to Swiss wealth manager Union Bancaire Privee, which also bought part of the offshore business in Geneva from Spain’s Banco Santander SA a year ago. In 2009, Commerzbank AG sold its Swiss units and ING Groep NV disposed of its private bank in Switzerland.

It won’t be long before other foreign banks take heed, strategize and exit and follow lead.