The fintech sector in Switzerland continues to boom. Two major cities in the country ranked second and third in a global ranking, confirming their results from the previous year. Only a city state performs even better. This emerges from a new study.
Thanks to excellent conditions, FinTech Switzerland remains a global leader and can continue to improve in some areas compared with the previous year. This is the conclusion of the “IFZ FinTech Study 2019” of the Lucerne University of Applied Sciences.
Zurich and Geneva in front of Berlin and Frankfurt
For the ranking numerous indicators were examined, which represent the conditions of the political and legal, economical, social as well as technological environment. Right behind the front runner Singapore follow the Swiss cities of Zurich and Geneva. Berlin and Frankfurt, on the other hand, only ranked 13th and 14th as the best placed German cities.
The number of Swiss fintechs rose to 356 companies, which corresponds to a growth rate of 62 percent compared to 2017. Key figures confirm the positive trend. Thus, the capitalization of companies and employment in the fintech sector increased. By contrast, financial service providers in the traditional sector saw a decline in these areas.
No crowding out of banks by fintechs
Nevertheless, the study authors do not assume that Fintech’s classic banks will be supplanted in the future. On the contrary, it is to be expected that the traditional financial institutions will implement the new technologies and innovations or replace existing services and processes.
The analysts recognize a certain pattern in the activities of the fintech companies. The detailed analysis shows that the finance-driven companies in the area of payment, deposit and leathering are focusing on the domestic market. In contrast, the tech-driven fintechs in the Blockchain & Co. area are generally geared internationally.
In the blockchain and cryptocurrency sector, where Switzerland has become a leading global FinTech center over the past few years, the market has had to cope with a strong correction. This is in line with the global trend, which led to a slowdown in the trading of cryptocurrencies following the fall in prices over the past year. For this year, many market observers, however, expect an upswing for Bitcoin & Co.