June 29, 2016     By : Marc P. Bernegger, First appeared in Lets Talk Payments 

Switzerland has everything it takes to advance to the league of leading FinTech nations. First-class financial institutions, leading banking software manufacturers and research departments of ICT heavyweights such as Google and IBM call Switzerland their home.

In addition, the Swiss Federal Institutes of Technology in Zurich (ETH) and Lausanne (EPFL) are among the leading international universities for technology and engineering which bring a lot of talent to the country. Also, the high quality of life in Switzerland is well-known and a magnet for highly skilled professionals from all over the world.

Currently, Asian cities such as Singapore or Hong Kong are at the forefront, followed by London, Berlin and New York. After all, we see a clear upward trend for Switzerland and actual studies say that there are more than 160 Swiss FinTech companies:

Source: Lets Talk Payments

As much as we are flattered by good rankings, it can’t be the goal to achieve top results in relevant rankings as quickly as possible. We rather must ask ourselves in what area we really can compete and on what strengths we can build upon. Because FinTech is not equal FinTech. FinTech is multifaceted and includes everything from banking infrastructure and payment solutions to lending platforms and digital currencies.

Numerous providers of digital currency solutions have found their way to Switzerland. The canton of Zug is already being considered a global center for cryptocurrencies and received the name Crypto Valley. In the Crypto Valley new storage solutions, new encryption technologies or new digital currencies are being developed. The possibilities are virtually unlimited – bitcoins are just one option among a wide variety of options.

The reasons for the success of the crypto-movement in the Greater Zurich Area can be found in well-known location advantages such as the long-standing tradition of privacy, the stable direct democracy and a supportive environment in IT. In addition, companies in the region started to form a cluster and offer a unique expertise in cryptographic or security issues. And cryptocurrencies are treated as a foreign currency in Switzerland. This means that no new laws are needed and the tax environment is highly competitive.

It is not to be expected that Switzerland will be among the leading FinTech nations anytime soon. Switzerland will be positioned in the midfield across all FinTech disciplines. However, in a few FinTech niches, such as the crypto-niche, companies might contribute to a strong growth. Similar to other successful Swiss industries, Swiss FinTech will be successful as a niche player.

Source: Swisscom