Good general conditions make Switzerland one of the leading fintech centers in the world. This is the finding of a survey for the year 2017 published by the Institute for Financial Services Zug of the Lucerne University of Applied Sciences yesterday. In a global comparison of 30 cities studied, Zurich and Geneva would be in second and third place, according to a statement. The Swiss cities would only have to be beaten by Singapore.
The number of fintech companies in Switzerland is increasing
The fintech industry has grown steadily over the past three years, writes study director Thomas Ankenbrand. At the end of 2017, a total of 220 companies were active in Switzerland, which corresponds to a growth of 16 percent compared to the previous year.
What are the top fintech start-ups in Switzerland? “Fintechnews” has published a ranking and selected the 19 most promising young companies of the year.
The study distinguishes six fintech divisions: Analytics, Banking Infrastructure, Distributed Ledger Technology, Deposit & Lending, Investment Management and Payment. Growth is “fairly evenly distributed” between them. The biggest contributors would be start-ups in investment management and banking infrastructure.
Capital is available, customers are missing
Especially the space train has caught up. “The excellent conditions, together with the accumulation of innovative entrepreneurs, the proactive authorities and leading research institutes, have led to the blossoming of the so-called Crypto Valley,” writes the HSLU.
Financing of fintech companies with venture capital and ICOs
The industry also benefited from the global ICO boom. Swiss fintech companies would have received a total of 271 million Swiss francs through this form of financing. Even traditional sources of money bubbled more strongly than in previous years. Investments in the form of venture capital increased in 2017 to around 130 million Swiss francs.
Access to finance is not the biggest obstacle for fintech companies, it goes on to say. It would be more difficult to find new customers. This is the biggest challenge for further growth in the industry. An important role is played by the fact that the fintech market is global. To be successful, Swiss companies would have to pursue an international strategy and find a niche.
Swiss financial center benefits from Fintech
The average size of companies, measured by the number of full-time employees, has increased compared to the previous year. “The industry has not only matured, it is also perceived as more mature,” comments Ankenbrand. Nevertheless, Switzerland has not yet exhausted its fintech potential. Especially in the technological field, there is still room for improvement.
Business models of Swiss fintech companies
All in all, 2017 was a successful year for the Swiss fintech industry, according to Ankenbrand. This trend is likely to have continued in 2018. This is reflected, for example, in higher corporate values, more jobs in the industry and a strengthening of certain fintech products. In addition, Switzerland’s entire financial sector appears to benefit from fintech growth and related technological innovations.
How is digitization moving the Swiss financial center? Find out in the special “Future Banking”. All contents can be found here.
The fintech study is available for download on the HSLU website as a PDF. Attached to the study are fact sheets on Swiss fintech companies, with information on the number of employees, financing, partners and business model.