Finance Technology | Finance in Switzerland | FinTech
this is Mount Pilatus in lern Switzerland more than 100 years ago a group of entrepreneurs developed revolutionary technology and built a railway to get to the top of the mountain faster it is still the steepest of its kind in the world the trip to the summit used to take a day on foot and on mule back now it was possible in under 40 minutes this Innovation put Pilatus on the map a similar Revolution is going on in Switzerland today fintech entrepreneurs are Reinventing the financial sector making it simpler cheaper and more convenient together with banks they hope to bring Swiss banking into the digital age I am Swiss and an entrepreneur I launched my first startup in Switzerland in 1996 founded additional companies in America and Japan and wrote books on finance and Entrepreneurship it seems to me Switzerland as a financial center and fintech are a natural match but we also face circumstances quite different from other countries to get a better idea of the state of fintech in Switzerland I visited founders of Swiss fintech startups in investors bankers and politicians they told me about their experiences challenges and dreams for fintech made in Switzerland I think the first wave was largely Euphoria it was unclear how we could use technology profitably and disruptively in financial services there was a lot of trial and error we had to wait and see which technology existed and how we could use it what technology means in general not just to finance is that um costs of doing things get reduced and things becomes more effective itive and whenever this happens uh labor gets freed up which can be used on other things and you will see wealth creation there are two ways to look at it one is the general perception of fintech this is largely from the Viewpoint of self-service b2c and attackers of the existing financial sector this is one way to look at it but there is much more in fact this is about digitization less of things you see on the front end but how we will create value in the future in the financial sector if you look at Uber it’s still about driving a taxi but it’s so much easier you press a button the taxi arrives you get in and that was it I think it will be similar with many Financial Services they will get much easier for customers we can offer services directly to customers this is the main difference these aren’t necessarily new business models we couldn’t imagine a decade ago we certainly knew it was possible back then but customers weren’t ready because they didn’t have the technology to take advantage convenience is certainly what customers will enjoy on a broad spectrum that’s where we’re headed perhaps less spectacular but I think if somebody described 5 years ago how to optimize the taxi business with Uber the description alone probably wasn’t that spectacular but if you can use the service today it is very spectacular if you have a field of business and you are subject to what is called disruption and disruption is if you are heavily into the taxi business and Along Comes Uber or you are running a hotel chain and along comes Airbnb or you’re running a bank and Along Comes Bitcoin those that will do well is those that uh that adapt to the new technology and those that will not or maybe even turn hostile will uh become a casualty of History it is much easier to digitize a media company than a bank but technology is capable of doing that now so it certainly will everything that can become more efficient will as always in economic history this also applies to the highly regulated financial sector the financial crisis certainly harmed the industry’s reputation but we can also repair a lot of things we have to put people back at the center and think how we can use technology to make Finance work to the benefit of people again if we can do this then we have achieved something and will also make a lot of money and it will be a lot of fun because we manag to build something great if you have this repertoire at your fingertips you can play wrong notes or you can play B taking advantage of the opportunity to play B and the pleasure to be creative is still missing people see the danger but not the opportunity we certainly see this as an opportunity of course change can always go both ways but in general we see this as a great opportunity if you look at the recent years it worked really well we said we put people at the center we use technology to offer new services that were previously unavailable and we bring these services to Market this has worked really well I don’t see why this should change if we continue on this path I want to work with something that matters uh and where you can significantly improve uh the lives of maybe the whole world population I mean that’s ambitious but know 80% of the world’s population do not have access to banking so they can’t trade with anybody that they can’t see and th they are poor um this is something we can do do much better if Finance can’t improve the lives of people we have no use for it it cannot become an ancillary discipline of Economics Finance exists to reduce risks for people to improve returns for people’s pensions never since the end of the second world war such great opportunities existed in this industry as today this is the best time for the financial sector if they take advantage of this opportunity I have been an entrepreneur since University for the last 10 years this is my second company the first couple of months was a bit difficult to get the first client clients on board which I find well pretty natural I guess in the financial industry because there’s a lot of trust going into uh into uh this industry Insurance brokering what we did at knip neither Dennis nor me had any idea of the insurance business we started by saying let’s think from the perspective of the customer this was the secret of our success because we didn’t think like people in the insurance industry who did things the traditional way but we applied digital knowhow to the insurance business the step from a Traditional Bank like UBS to a fintech company was not a big step Finance is finance the interesting thing was how we could use technology to be different we had a few hundred clients so we knew that we could sell our product we decided to take on a little more risk and founded a company exclusively for this product we also found investors who believed in us together we developed the business and in the last two years our client base increas by Factor 10 because we put a great emphasis on flexibility we we often tried to come up with a good solution for our clients and then things started to take off more and more clients joined the platform and uh now all of a sudden we have uh quite a great growth rate I often went to the office with a big smile on my face with a rush of endorphins on the other hand as a startup founder you let all this get very close to you being an entrepreneur not only means taking risks but also having privileges being creative creating something new this has a lot of value in Switzerland we should present entrepreneurship honestly like it really is the culture of a bank is certainly different from a three-year-old Tech startup some reasons I understand and others less so many companies in the in the fintech sare and that was also kind of how the general public saw it was that okay now these fintech companies are here and they would like to kind of out compete the banks over the next 10 years banking is going to be dead in 10 years but I don’t think that is the way to go I think banks have been around for way too long for that to happen the infrastructure is there the relationship with their clients are there so what you have to do in order to be successful on the market both being a bank or being a fintech company is to see where can where can your interest actually overlap and where can you find collaboration opportunities and see how you can kind of grow together this process took about 10 months probably quite fast for a bank but for us it was something times a game of patience but after about a year we released our solution and that was really a milestone for us and also for our customers all Big Ideas started in a garage Apple didn’t start in an incubator but in a garage I first have to prove my solution has legs that it works in test markets and from that big things emerge when our big Venture round came that was an entirely new game also when we expanded to Germany with a market 10 times as big as Switzerland and all this in a very short time these were all huge Milestones that we and our team had to process first we were two people then 10 then 30 50 70 120 that was a big challenge but also a fantastic challenge we looked at the margins in our mortgage lending business and quite frankly had a shock we needed to do something urgently growing in mortgage lending with little risk is tough so we had to think of other options digitization certainly lowers barriers to entry you can get to the market with a good idea more easily but the same thing is true for us Banks as well our Approach at credit Swiss is participating in the relevant topics and seeing how we can integrate ideas coming from startups in our digital offerings what we did differently was that we began a strong Outreach starts VCS we approached startups V Consultants technology providers of all kinds also Regulators politicians or interested clients our ecosystem is extremely broad I am the only one in our team with a banking background everybody else has a totally different background media professionals a physicist a lawyer an artist somebody coming from an NGO a broad selection so we can have a varied approach also people who had their own startups who said I have an idea I start a company our Swiss customers internet Savvy enough to get a mortgage online without stepping into a bank bus case we believed in this business case and it was great to see it took off shortly after launch today it is the flagship of our online offerings and it also gave us the reputation as the most digital Bank in Switzerland the process is usually more complex than it looks like from the outside but we have cooperative and proactive meetings and we’re looking for Solutions startups want to work with us and we also want to innovate in the end we find a solution we have to manage a world of two velocities a relatively low velocity within the organization to ensure stability but outwardly we have to become more efficient and faster especially with fintech companies and other tech companies what are the mistakes of the media industry what are the mistakes that Kodak made we try to avoid the same mistakes we have an advantage were not the first industry undergoing this Paradigm Shift the agility and the mentality of fintech startups experimenting being fast learning also leaving the traditional path companies definitely need to do this as well in the future why should the customer not replace me why am I better I can work with physical elements that enhance the digital world or I have to be half a step ahead of the competition and anticipate what customers want next we shouldn’t think customers are slow in the digital world they can be very fast if we made all these digital offerings just for fun with nothing to show on our balance sheet people would hardly call us the most digital Bank in Switzerland or invite us to conferences to present our case the impressive thing is that we tried something new and we are successful with it all banks are in motion now we see this in the associations we are part of the Swiss bankers associ iation has an expert group for fintech economy Swiss has an expert group SEO wants to form an expert group now we have a little too many expert groups but the pitch has sunk in this is here to stay and we have to deal with it I would strongly advise against using the term cannibalization this is a complement to the existing business model and those who won’t change will lose clinging to traditional business models for too long is dangerous on the other hand it is also unnecessary to let them go too early with many things you first have to build a foundation and the use cases will follow all in all there are a thousand little steps that will develop into something very robust in the end we have the goal to establish Switzerland as one of the world’s fintech startup hubs we can be a world leader especially in the insurance industry but in banking we have to catch up so land as a financial center can play a central role in the future in recent years associations and conferences have mushroomed to create Global awareness for fintech in Switzerland and also help pressure the regulator the reason for this is the realization that Switzerland is a banker’s Nation number one in wealth management but we’re not on the global fintech map from an Investor’s perspective Switzerland is certainly no Hub today with an extreme draw for fintech startups many models originate in Switzerland like in other places as well we have good framework conditions in general because we have a strong financial industry but we’re no nowhere near Berlin and London startups with more than 100 staff after a few years of operations are scarce in Switzerland if you look at the number of such startups in Berlin or London you have a mild shock they hire more people each month than the entire head count of companies in Switzerland after three or four years we are a small country we have a very small market and digital business is primarily a Bish business it scales with Market size what we are lacking in fintech are Swiss companies that succeed Beyond The Swiss German or the French German Market those that want to become Market leaders in Europe or in the world in some areas the thing I’d like to see more of in Switzerland is slightly more unreasonable on entrepreneurs because it’s those that have to figure out how can I as a tiny company really become a world leader in this new field that takes an unreasonableness and and and a turning back on everything that if you like your education has told you you should be I understand that Switzerland doesn’t do industrial policy that’s a fact that people tell me all the time one has to accept that but the world is moving on and other count do industrial policy for fintech this new world is not about an egosystem revolving around one person alone but an ecosystem where we all work together at eye level that is still missing and needs more work this is completely different in other countries where you have a much bigger Community aggressively working on new ideas we we don’t have that in Switzerland therefore the pressure to work together is much lower we have a bit of a feel-good society in the financial sector in Switzerland still Switzerland as a financial center should collectively make the decision to move forward instead there is a lack of coordination and Financial Resources some people think everything is okay this is just not true when I speak with politicians I find most of them have no clue what fintech is I strongly believe a large startup fund would be important for the Swiss fintech ecosystem with large I mean 500 to 1 billion Swiss Franks this Capital should be available for series a and series B rounds for bigger tickets for Swiss startups in my opinion we have the money for instance from Pension funds the only thing missing is somebody taking the lead and orchestrating ity Silicon Valley began like this it is so successful because of the large amount of venture capital that is available there it is a close-knit cluster with an extreme dynamism we have excellent conditions in Switzerland to build something similar in fintech in the next 5 years if you have all the talent available in this Factory why not simply do it the most frustrating thing is that it needs a relatively small amount of money why not invest in young people young entrepreneurs who give an arm and a leg to create jobs why not put only 0.1% such a tiny amount in some kind of government fund for Swiss entrepreneurs I just don’t understand the train has not yet pulled away completely we absolutely have a chance to catch up but we would have to go at it at full speed the times in my life when I’ve achieved the most is when I put myself in danger the most and it is interesting because there’s something about the human condition and performance in that I believe that we perform at our best when we challenge ourselves a little bit sure there are obstacles but I learn to ignore them sometimes you have to say just put an obstacle in my path I’ll walk around it innovation in business is not coming from inside companies there must be exceptions but in general it does not come from within topics like crowdfunding or blockchain or sharing economy aren’t obvious for a bank nevertheless we began to investigate what we can do with the blockchain how we can integrate it in our business or how to interface with other companies and if this all makes sense blockchain is blockchain is finance and technology so it is fintech by definition still it is somewhat separate from the fintech scene and I often wondered why one reason is that it is very ideological many people with a focus on bitcoin or cryptocurrency don’t want to launch a startup simply to make money they want to revolutionize the financial system it is extremely important for a company to open it doors to accept new ideas and new business models into its own culture first we encouraged our employees to submit new business ideas at some point we realized that we shouldn’t restrict Innovation to our own staff the world should be our playground so why not invite everybody to participate scouting is relatively straightforward that’s the case with us too we have a lot of good ideas coming to us from the outside many startups contact us and want to collaborate the real challenge is to accept the ideas into the company a healthy business location is like a forest if you’re frantically trying to support all the old trees that’s unsustainable the sustain able approach is to say okay sometimes an old tree will fall down because it has become rotten and brittle but new trees have space to grow in its place the biggest danger lies in preventing the growth of new trees for instance if regulatory overhead is so large that startups can’t afford it I think we were sometimes better off if we took a little more risk the way forward consists of many small experiments those that succeed will help you develop you can reach a point that allows you to create new revenue streams or a new customer experience but the one big leap directly into the honey pot I don’t think it exists if a bank can adapt fast enough I don’t think its business model is in danger difficult is deploying a new Technology Innovation is not mastering a new technology but deploying it in the market if we look back in 10 years in 2026 maybe we watch this video and what we said back then I think we will have to deal with things that we currently don’t have on our radar the management must learn to live with this tension evolve constantly and if you have enough facts to make a decision make it boldly and go down this path or another or also abandon an idea once in a while in 10 years I imagine new technology and blockchain in particular will bring fundamental change that we can’t fully take into account today especially in financial intermediation with this I mean the functions of intermediaries that technology could fully replace in the end digitization will concern us all I still wonder what exactly a digital hairdresser will look like I haven’t quite found one yet but for almost all other areas I have some idea what digitization will look like the changes will be fundamental we better think about possible scenarios and how we will live together in the future I also talk a lot about the possibility of doing things but relatively few people actually do it for instance emit a Swiss frank coin on the blockchain or found a digital autonomous organization that performs a service tools some tools are still missing for that which all software developers depend on but in general what’s missing is the spirit to just do it excellent fintech companies exist in Switzerland not that many but fantastic companies that managed to team up with large Banks and create substantial value it’s a beautiful image the Traditional Bank that has existed for 100 or 150 years and a fintech entrepreneur who is perhaps 30 years old who launched his company just a few years ago he managed to solve a problem in the market together with a bank I salute these entrepreneurs and we need more of them it’s a fantastic opportunity for Zurich as a business location to take advantage of technological innovations in finance to think about new ideas and establish them and strengthen the financial sector in which Zurich is already a leader the Swiss way to work together is very special our distances are short somebody from Geneva can come to burn somebody from Zurich can come to burn and we all meet up in Burn that’s different from flying to Singapore or New York and using video chat is still not the same as sitting face to face we have a lot of knowhow in this country banking is in our DNA not just chocolate and cheese with UBS we have the biggest wealth manager in the world Black Rock said Switzerland is important strategically we have a lot of good brands with a lot of knowhow I came to Switzerland 3 years ago I co-founded knip and then the association Swiss Finance startups everybody gave me a heartfelt warm welcome I don’t take that for granted and I give Switzerland great credit for it if you invest a lot of effort in being an entrepreneur and I’m sure you know that yourself you might as well do it on as firm a foundation as possible uh because it would be very sad to invest so many years and sacrifices uh only to found that you were in a jurisdiction that will pull the carboard away from under you Switzerland has an excellent jurisdiction not only for uh fintech or blockchain technology but in a very large number of areas privac privacy security digital identity we are the country of Human Rights neutral and politically stable perfect for a global solution especially in Switzerland the Trust In Banks and insurance companies is still massive let me ask you a question if you could have a financial service from Google or Apple or from an established Swiss bank which will you choose independent of age or class people have Rock Solid trust in Swiss banks and insurance companies if we manage to develop a disruptive business model in Switzerland perhaps with knowhow from a bank and swiss universities this would be an excellent success story for Switzerland a country with 8 million people developed a ftech lighthouse project that people in Singapore enthus about people in London are watching it star eyed wouldn’t this be the best marketing we plan to establish a blockchain research Hub in Zurich I hope we will succeed This concerns more than the financial sector alone it equ applies to the insurance industry there may be new sectors we don’t even imagine for which we can become providers I think Switzerland has an excellent talent pool we have knowledge and the reputation that we should put to good use the point is to transform Finance to fintech the financial knowhow is here still how can we transform it into the future into the digital world it’s a fact we don’t have natural resources like oil or gas we mainly have our brain and our talent for Innovation these are our strengths and we should build on them we should cultivate them and we have this opportunity I think we can play a leading role in this market in the world and also strengthen the Swiss Financial Center my advice for the Swiss people is the following have courage and become entrepreneurs take risks and don’t feel discouraged in case you fail if we have more startup Founders an ecosystem will form Founders attract investors they again attract Innovation Labs from large corporations such as UBS with level 39 in London this will create momentum that cannot be stopped I think crypto will help uh bring trans transparency to to finance but certainly also democratize it the beauty is we don’t have to take on huge risks just be a little less risk averse than everybody else and already were the best business location people will become more more open-minded to actually Finance ing maybe the business that you have around the block rather than just putting your money on the stock market so when people become more and more open around this I think it creates different type of community the opportunity to develop new ideas with Innovative clients it’s great fun an amazing time that’s my wish that we all work together on the Swiss fintech ecosystem there’s the ecosystem between Banks and startups many are doing this and it is sexy but it’s also about Banks working together among themselves not against each other with each other let’s not put our own interests first but think about what the Swiss financial sector needs to catch UPS Vis the way forward is taking the strengths of startups and taking the strengths of Banks and seeing how they together can create value for customers there’s one characteristic that I think is very interesting here in switzland that you have some of the biggest traditional Rivals collaborating wow the unity Switzerland is showing here is unique and it differentiates itself in the world this is extremely positive but the government should also be part of this it needs to create the right structure and Regulatory environment Banks fintech companies the government politicians we should all together push this forward we have to explain what’s happening in Switzerland and why startups should come here and we should learn from the Americans and the British to make a little more noise and do marketing be convinced that we want to be the global hub for fintech in three or four topics.
- Is finance in demand in Switzerland?
- Which country is best for fintech?
- Is Switzerland good for studying finance?
- Is Switzerland known for finance?
