Rising Fintech investments & progressive regulations
Growing Swiss Fintech hubs & a pioneering Swiss DLT Bill
Switzerland is the 5th largest Fintech player globally, overweight in the WealthTech subvertical and with a unique legal framework for Digital Assets
The Swiss asset management industry is punching its weight in the world. The speed of adoption when it comes to digitization and moving towards offering a full-service model needs to pick up. Those that eventually transform to a hybrid approach, with best-of-breed digital tools for the adviser to be able to offer a better level of engagement and personalization are those that will win out. Service providers in asset management have to delight their customers and technology is the enabler.
Digitization of the Swiss asset management sector is of course helped by FinTechs and here, Switzerland is doing well. There are 350+ FinTechs in the country with about 40% of those focused in the wealth management space. As elsewhere in Europe there has been a massive uptick of investments into Swiss Fintechs; Q3 2021 saw some CHF 694m invested, up by 38% on the previous year.
Growth in the Swiss Fintech industry is further evidenced by Findexable in their 2021 Global Fintech rankings. Switzerland is ranked as the 5th largest FinTech player globally and within Europe it is 2nd after the UK. Within Switzerland Zurich, our leading FinTech city, ranks 26th globally and Lugano is the up and coming Swiss Fintech hub in 2021, having moved up the Findexable global scale by 12 places in the past year.
At the same time, the traditional Swiss wealth management industry has less players, as those that have not been able to deal with the relentless pressure on margins and the rising and changing customer expectations, have not survived. A consolidation trend that started with Covid continues, in an industry-wide attempt to acquire assets. For the first time ever, the Swiss private banking sector numbers fewer than 100 private banks.
However, the future is bright for those able to harness the tools offered by digitisation and create valuable customer journeys. Clearly, Robos have not replaced human advisors or asset managers as some had feared. On the contrary, the human relationship in the wealth industry remains core. Those able to adapt their business to create a hybrid model with robust process management, customisation tools, and human advice, will be those that prosper going forward.
Moving away from the traditional wealth management, the other significant development in Switzerland is its leadership with regards to the emerging Digital Assets space powered by Blockchain. Switzerland has been at the forefront of this industry and this year has seen additional regulatory clarity for compliant tokenized assets. The 2021 Swiss Distributed Ledger Technology (DLT) bill provides legal clarity in areas like ledger-based securities and Digital securities exchanges. This new legal framework will allow new business opportunities
in the Swiss asset management industry. Switzerland is already home to two fully licensed banks specialized in Digital assets and the Swiss stock exchange is building a regulated
exchange for Digital assets. The Swiss asset management sector has a great opportunity to not only integrate the new Digital asset class but also to transform behind-the-scenes processes by adopting the emerging ledger-based rails.
Swiss Fintech innovation has moved with the times and in the case of Digital Assets, ahead of the times. Leveraging technologies to delight customers and equally innovating behind the scenes, are both in full force in Switzerland.
This is my introduction to the 2nd Swiss Wealth Technology Landscape report which covers the wide spectrum of technologies available in the Swiss market.
The report is a growing directory of nearly 50 Swiss wealth management providers. It includes 20 extensive profiles of select players and several thought-provoking articles on topics like:
— The purpose of the new Swiss Open Wealth Association
- The Open Finance business culture penetration in CH — The Blockchain & Digital Asset explosion in CH
Here is the entire report is here
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