The Swiss fintech ecosystem experienced significant growth in 2017, aided by a supportive regulatory framework, traditional financial players’ willingness to collaborate with startups, and new international fintech agreements.
As of December 2017, the Swiss fintech scene had 209 startups, according to Swiss Fintech Map by Swisscom and eForesight. Most of these startups are operating in the areas of investing and asset management (57 startups), crowdfunding (46 startups), cryptocurrrency and blockchain (28 startups) and payments (21 startups).
In particular, Zurich is quickly emerging as Switzerland’s fintech hub. Zurich is the country’s largest city and the largest financial center. It is already an innovation hotspot that many believe is on the fast track to become a standout European tech hub.
Here are some of the most important events that happened this year in the Swiss fintech space:
New fintech regulation
Image: Regulation by Nick Youngson via Creative Commons Images
On July 05, 2017 the Federal Council adopted revised banking regulations. The new regime formally entered into force on August 1st, 2017 and is set to simplify crowdfunding, payment processing services as well as other business models that comprise the acceptance of funds from the public.
The amended rules provides for an special exemption that allows companies to hold funds in a settlement account for 60 days without the operation of such account being deemed an acceptance of public funds subject to licensing under the Banking Act. Additionally, companies are now allowed to hold public deposits of up to CHF 1 million without having to obtain a banking license.
Finance minister goes on Asian tour
Ueli Maurer, Switzerland’s Head of the Department of Finance, via Wikipedia
Swiss finance minister Ueli Maurer traveled across Asia in April to meet with ministries and authorities, state institutions and financial players in Beijing, Shanghai, Hong Kong and Singapore. Talks and meetings were primarily centered on bilateral and multi-lateral issues, as well as specific fintech cooperation at the state and private sector levels.
The aim of the visit was to foster collaboration with foreign players and jurisdictions to boost fintech innovation and facilitate the expansion of Switzerland’s fintech startups into the Asian continent.
Along the same line, the Switzerland Greater Zurich Area AG signed a Memorandum of Understanding (MOU) with the Fintech Center of South Korea in September. The agreement aims to enable fintech South Korean startups to expand to Switzerland more easily and build friendly fintech ecosystems in both countries.
Other international collaborations that were signed this year include the alliances between the Swiss Finance + Technology Association and the Abu Dhabi Global Market as well as with the Fintech Association of Hong Kong, a collaboration between the Australian Securities and Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA), and a MOU signed between the finance ministries of Switzerland and Israel.
Swiss fintech startups go global
CreditGate24 unveiled plans to expand to Germany, Europe’s biggest economy. The startup, which offers a peer-to-peer lending platform, is planning to open its first branch outside of Switzerland in Berlin. It has already installed a team in the German capital. Also Loanboox, a lending platform for communal cities recently made the move to Germany.
Zurich-based Avaloq, which provides cloud-based solutions for more than 150 international banks worldwide, is looking to expand to Hong Kong, mainland China and the US in coming years before seeking a stock market listing, possibly in Hong Kong, the company said in October.
Financial regulator investigates ICOs
Image via Pixabay
FINMA issued guidance on ICOs in September shortly after the authority shut down the provider of an alleged fake cryptocurrency.
The QUID PRO QUO Association had provided so-called E-Coin for more than a year and had amassed funds of at least CHF 4 million from several hundred users.
At the time, FINMA said it was investigating around a dozen other possible fraud cases.