Fighting diminishing profits caused by fierce competition and a global clampdown on tax evasion, these banks must work to cut costs and buy up competitors to reach adequate size.
But many of the affected banks will ultimately have to exit the market, the study concluded.
"I'm convinced that at least half will disappear," KPMG manager Christian Hintermann said, adding many of these banks were now making losses. "It's ultimately a question of how long their owners want to carry these losses."
Some international financial groups were already considering the future of their Swiss private banking subsidiaries, he said.
The study, undertaken by KPMG in collaboration with the University of St. Gallen, examined 85 of 114 Swiss private banks. Switzerland's two biggest banks, UBS (>> UBS Group) and Credit Suisse (>> Credit Suisse Group), were not included.
The study found a maximum of 10 to 15 of the banks would be able to grow and attract new international clients in substantial numbers.
A further 20 to 30 of the banks could have a future as niche operators focusing on particular client groups.
The number of Swiss private banks has already fallen by over a third from 180 in 2005, according to the data.
While many banks had increased assets under management by buying competitors, this did little to boost operational earnings, which had fall during the past decade.
Acquisitions have now become rare after a wave of consolidation in past years, Hintermann said.
Many banks are not interested in making smaller bolt-on purchases, he said, or the owners were too ambitious in the prices they were seeking.
(Reporting by Angelika Gruber; Writing by Brenna Hughes Neghaiwi; Editing by Keith Weir)