A country comparison of the fintech industries shows that Switzerland has become the European stronghold. On a key question but it still seems to hapern.
One can not put it another way: Germany has a miserable development in the field of fintech in absolute terms. In 2018, the federal government counted just 90 fintech startups, and this in Europe’s largest economy, while the United Kingdom, for example, with 464 proved five times as many. In response to a parliamentary question, the German government relied on figures from the European Parliament, as the German newspaper Handelsblatt reported.
Of course, while Germany may have few, it has produced some successful fintechs. Examples include N26, the Mobile Bank, which wants to gain a foothold in Switzerland this year. Or the Fidor Bank, which has launched loans with negative interest rates on the market.
The nose in front
Nevertheless, the balance sheet of the Swiss fintech scene is at least numerically better there: At the end of 2018, there were 356 fintechs in Switzerland, as a separate study of the Institute of Financial Services Zug (IFZ) of the Lucerne University revealed. Of course, a close comparison between two studies warrants caution, but the trend seems clear: the Swiss financial industry, which has stood for tradition and eternal values for decades, is moving and it is moving at a high level.
“In the worldwide fintech hub ranking, the cities of Zurich and Geneva continue to rank second, respectively three,” write the authors of the Lucerne University of Applied Sciences. “The excellent conditions mean that Swiss fintech companies can counteract the decline in traditional financial institutions”.
It is noticeable that Bundesbern has sacrificed the traditionally cautious attitude in favor of a more active industrial policy. Both the now resigned Minister of Economics Johann Schneider-Ammann and Chief Financial Officer Ueli Maurer have made pointedly positive comments on the development of financial technology and promised appropriate political support.
In December 2018, for example, the Federal Council approved the report of the “Blockchain / ICO” working group, which commissioned the administration to prepare adjustments to the legal framework so that Switzerland can optimally exploit the opportunities offered by digitization. This work should be completed in the first quarter of this year.
Swiss bring less capital
The attitude of Swiss politics clearly contrasts with that of the German government, which has rhetorically also upgraded, but remains behind in the implementation of the claims.
Frank Schäffler, the representative of the German FDP, who had formulated the above-mentioned question concerning fintechs in Germany, said according to Handelsblatt that the big coalition prefers to deal with itself rather than creating the necessary conditions for future technologies, because: a startup need a different supervisory regime than a private bank.
What stands out when comparing the two studies is the mismatch in the financing of Fintechs. Although Swiss fintechs attracted more venture capital last year (324 million francs versus 130 million last year). In addition, there were 15 “Initial Coin Offerings” (ICO) which generated an additional 386 million dollars (2017: 16 ICO provided 668 million dollars).
British watering can
In Germany, however, fintechs have gained around 630 million euros in the first nine months of 2018. This would have the comparatively few German fintechs collected in about the same amount of money as the four times more numerous Swiss colleagues. Not to mention the British fintechs who, according to the study, received 13.6 billion euros.