Swiss Fintech Highlights 2017

Swiss Fintech Highlights 2017

by May 2, 2017
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Digitalization and evolving client needs are changing all areas of banking, bringing both substantial opportunities and challenges. For Switzerland, a recognizable financial center with a famed banking system, fintech has become a top priority.

To tackle the sizeable challenge, Swiss regulators, corporates and academia have toured the world to connect with the global fintech community and encourage collaboration.

In January, a Swiss delegation visited India on a one-week fintech tour that intended to act as a “door opener.” The visit, part of the Swissnex initiative to connect Switzerland with India in science, education, art and innovation, allowed the Swiss delegates to engage with stakeholders in Bengaluru and Mumbai.

The tour included pioneering companies from the Swiss fintech scene including Qumram, investiere, and newly-launched ValUbot, which met with Indian fintech startups such as Zestmoney, signzy and Razorpay.

In April, Swiss banking representatives joined finance minister Ueli Maurer in a tour across Asia. The high-level Swiss delegation stopped by Beijing, Shanghai, Hong Kong and Singapore, where it visited ministries and authorities, state institutions and financial center players to discuss bilateral and multi-lateral issues, and specific cooperation at the state and private-sector levels notably in the area of fintech. However, the local Swiss Fintech Industry was not really part of that (Read: “Ueli Maurer lässt die jungen Wilden sitzen, NZZ“)

In addition to connecting with the global fintech community, Switzerland is also working internally to boost financial innovation, lower barrier to entry and help homegrown startups to further grow and scale.

Switzerland has significantly stepped up its game this year. Today, we look at some of the key highlights in fintech development so far in Switzerland.

Please comment below if we forgot something important.

 

New fundings

Advanon Founders

Advanon Founders, Phil Lojacono, Philip Kornmann and Stijn Pieper

Advanon, which offers an online platform that allows small and medium-sized enterprises to finance their open invoices directly through investors, has closed its second round and raised CHF 13.5 million.

Swisscom, Switzerland’s largest telecom firm, the two venture funds b-to-v Partners and VI Partners as well as the founder of Partners Group, Urs Wietlisbach, participated in the round.

The new funding will be used to strengthen its position in Switzerland and expand into the German market.

Advanon has over 450 investors on its platform. Typically, an invoice on the platform would get financed within an average of five minutes, the company claims.

Bexio, a leading provider of cloud-based business software for small and medium-sized enterprises, has raised CHF 7.5 million in funding from Swisscom Ventures and other investors. The company said it will use the new capital to expand its platform and grow its user base.

Meanwhile, bank software group Avaloq has received a CHF 300 million capital injection from private equity firm Warburg Pincus, valuing the company at more than a billion Swiss francs.

The deal gives the New York-based firm a 35% stake in the Swiss company and was described as a first step towards a potential public listing.

Centralway Numbrs, a Swiss-made banking app that has launched in Germany, has picked up a new backer earlier this year. The Investment Corporation of Dubai has taken a “significant” stake in the company. The exact investment amount has not been disclosed.

Headquartered in Zurich, Numbrs originally came out of Swiss company builder Centralway. The company was one of the first mobile banking aggregator apps. It lets users track and manage their spending across multiple bank accounts from a single mobile app.

 

New products launch

lykkeSwiss fintech startup Lykke has launched the Lykke Accelerator, a service providing custom integration of Lykke’s apps, trading platform and other digital products.

The Lykke Exchange is an open-source exchange that leverages blockchain technology to offer immediate settlement and direct ownership of any kind of financial instruments.

Lykke recently raised CHF 2 million during a special three-week public offering. The company added more than 340 new investors.

Meanwhile, Swiss banking group UBS has introduced Twint, its new mobile payment solution in Switzerland which has already been adopted by more than 30 banks.

The mobile payment solution can be used to make payments at stores, vending machines and at more than 1,000 online shops. The app is free for anyone with a UBS account or Swiss credit card of any kind. Payments made with Twint are debited directly to the bank account or credit card.  UBS also announced during the Finance 2.0 Conference the new Digital ID Standard.

 

Fintech accelerators and startup competitions

F10 Fintech Incubator and Accelerator - Investor DayF10, a fintech incubator and accelerator, has added three new corporate members specializing in insurance, pensions and financing: Baloise Group, Generali Group Switzerland and eny Finance.

Applications for its P2 Fintech Startup Accelerator Program were closed last week. For its third batch, F10 is looking for up to 20 startups in the fields of fintech, insurtech and regtech.

Filipino startup Acudeen Technologies was named the overall winner for the Seedstars World 2017, a global seed stage startup competition that concluded in April in Switzerland. Acudeen competed against startups from 65 countries at the pitching contest held at the SwissTech Convention Center in Lausanne and received US$500,000 in investments.

Acudeen helps small and medium-sized enterprises turn their invoices into cash through discounting of their receivables.

In March, the Swiss Fintech Awards announced the winners for the year 2017. Crowdhouse, a real estate crowdfunding platform, won the Early Stage Startup of the Year award, Qumram, a regtech startup, won the Growth Stage Startup of the Year award, and Swiss Finance Startups, a non-profit organization aimed at driving innovation and foster the local fintech industry, won the Fintech Influencer of the Year award.

 

Regulation

Fintech regulation

Image via Shutterstock

Given the growing importance of the fintech industry in Switzerland and its potential to contribute to the quality and competitiveness of the country as a financial center, the Swiss Federal Council has launched a proposal for amendments to the Banking Act and the Banking Ordinance to ease the regulatory framework for fintech operators.

On February 1, 2017, a public consultation procedure regarding the proposed amendments was opened. These are based on three key pillars: the creation of a largely unregulated innovation sandbox, specific regulatory amendments regarding settlement accounts, and the creation of a new license type (a “lighter” banking license).

The proposed new regulation, which is expected to enter into force by 2018, will be neutral in terms of technologies and business models, implying that the new exemptions will also be available to businesses outside the fintech space.

Currently, the Swiss regulatory regime contains no explicit provisions on fintech or fintech companies. Rather, the legal framework governing the activities of fintech operators consists of various laws and regulations.

Depending on their specific business models, fintech operators can become subject to the Banking Act, the Anti-Money Laundering Act, the Stock Exchange Act, or the Financial Market Infrastructure Act, among others.

 

Featured image: Flag map of Switzerland, via Wikipedia.

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