Suparna Goswami Bhattacharya
The European nation is fast developing into a fintech startup hub
Though internationally Switzerland is known for its watches, chocolates and secure banks, it is fast developing into a fintech startup hub. So much so that it is giving tough competition to the leaders —London, Berlin, New York and Singapore.
Here are a few statistics. In the beginning of 2014, there were less than 50 startups in the fintech space in Switzerland. By October 2015, the number increased to 150. There are many factors assisting the growth of fintech startups in the country. Urs Haeusler, CEO, DealMarket, a global private equity marketplace, says, “Zurich and Geneva figure among the world’s leading financial capitals and have a long history of leading the way in finance.”
The country also prides itself for having a stable political environment and a secure economy, both of which are needed for the development of a healthy startup environment.
Marc Bernegger, serial entrepreneur and fintech investor based in Zurich, feels Switzerland has everything it takes to advance amongst the leading fintech nations. “The country has first-class financial institutions such as UBS and Credit Suisse, leading banking software manufacturers, such as Avaloq and Finnova,while research departments of ICT heavyweights, such as Google and IBM, call Switzerland their home,” he explains.
Bernegger adds that Switzerland is a country where people are fond of using new technology – something that is of benefit to the financial sector, too. “As demand grows, so does supply, and the Swiss financial centre is increasingly spawning innovative fintech startups. When it comes to consumer-facing web and financial technologies, the Greater Zurich Area is the undisputed innovation hub.”
Christina Kehl, co-founder, Knip, a startup, feels the industry is underrated, which makes it more interesting. “We just wanted to find a solution for our own insurance management hassle and ended up in the fintech industry. Insurance is a digitally underrated and underdeveloped industry, which makes it an interesting playing field.” Kehl thinks eventually companies may start focusing on specific areas within fintech, like wealth management, blockchain and insurance.
According to a study by Roland Berger, a consultant firm headquartered in Munich, and Dealmarket, the vertical payments sector was dominating the fintech industry in 2012 while it was wealth management in 2014. This year, it is the crypto, says Philipp Angehrm, managing partner, Roland Berger. The study states that a small but exclusive bitcoin/crypto hub is emerging in Zug, a city in Switzerland. Also, seeing large opportunities, blockchain startups are raising significant amount of funds.
However, the nation still has a long way to go before being called the leader of the world for fintech startups. For this, the ecosystem needs to be further strengthened by having more interaction between corporates and startups. “Switzerland needs the right backing from the government and a regulatory environment that is pro-innovation to enable fintech startups and companies to build new innovative and disruptive businesses and products,” says Haeusler.
Angehrn believes that more success stories will encourage growth of the sector, which will attract professional venture capitalists to invest. “Also, I feel the focus should be on our strengths like wealth management, crypto technology etc.”