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Fintech in Switzerland: Now is the time to launch next phase
August 03, 2015

Fintech in Switzerland: Now is the time to launch next phase

Switzerland is sometimes said to have missed the boat when it comes to fintech. But despite all the doomsday prophecies, fintech has established itself successfully in Switzerland. Thomas Sutter explains what is now needed to ensure its long-term success.

Fintech has replaced banking-client secrecy as the new magic word in the financial centre. And we are faced with the same situation that arises every time something new develops in Switzerland. Startups are slogging away day and night, and when they take a break, they look enviously to other countries, and await for Level 39 to emerge overnight in Switzerland and solve all their problems. There is a biotope of hangers-on, of so-called experts and deal makers, emerging around the fintech scene. Bodies from all of the language regions, responsible for promoting their locations, want to be responsible for everything, and are spreading themselves too thin. The top dogs see themselves as being affected to varying degrees and are commissioning strategies for the next ten years. The government is focussing on the urgent aspects instead of the important ones. Yet what is being forgotten in the process is that in this situation, the things that are important are also urgent. The regulator is deflecting responsibility or saying that “it’s all covered by the law”. The Association is up to its ears in addressing issues related to the past, it is analysing, discussing. As far as the media are concerned, it is already too late on all fronts and everybody else is already way ahead in the game. And what exactly is “everybody else” doing? They are watching and laughing up their sleeves.

Objection: There is a lot more going on across the board than what is perceived

But the reality is actually quite a different one. Over 100 fintech companies with enthusiastic entrepreneurs have established themselves here, and are growing and getting organised. Numerous banks – and not just the big ones – have launched fintech products and have identified an increase in customer solutions as the primary objective for their amended business models. If one is to believe media reports, then the regulators are emitting cautious billows of white smoke. Eureka! The issue appears to have finally made it to the offices of the authorities. Now all that is needed is a critical article in the Financial Times about the status of the fintech scene in Switzerland to confirm that we really are on the right path and that London can feel us breathing down its neck.

Call for a disruptive approach

In order to get to that point, however, we have to work hard. Fintech is said to have significant disruptive potential. For me, that means that the time-consuming, typical Swiss mechanism I described at the outset must also be “disrupted”. Time is of the essence. “Done is better than perfect”, as they say. So from here on in, I will limit myself to four measures that I consider to be important – knowing full well that many others are required.

  1. The political system cannot be fought or negated. Instead, it must be worked with. Sweeping criticism from the fintech crowd is passé and the noise level needs to be reduced. What is required is substance. The political agenda can only be influenced by means of concrete demands.
  2. The government must make a clear commitment to the growth of fintech in Switzerland, and also demonstrate what is hopefully an existing digital affinity. This has nothing to do with industry policy, and does not cost anything. It is, however, the urgently awaited signal to the domestic fintech companies, and even more so to potential new players, that Switzerland is ready.
  3. Laws and regulations must be examined to ensure they are also suitable for digital business models, and to establish whether they work if applied to a reconfigured value added chain.
  4. The numerous individual measures must be driven forward in a coordinated and timely manner. As the representative of the banking sector, the Bankers Association is prepared to do its part to this end.

And if all stakeholders shed their typically Swiss “yes, but…” mentality and replace it with the Anglo-Saxon “why not?” approach, then I am not worried about the Swiss financial centre, or its established and new Players.