Fintech

There are few locations to rival Switzerland’s fintech potential

There are few locations to rival Switzerland’s fintech potential. Photo: Shaun Weston
Written by Devie Mohan

John Hucker outlines Switzerland’s credentials as a leading fintech hub, and its potential for further growth.

John Hucker is the founder of FinteCH Meetup Zürich, which grew to become Swiss FinteCH, which he now leads. John also initiated fintech engagement for a leading Swiss bank as part of the innovation team at Digital Private Banking. Prior to that, he worked in wealth and asset management at UBS and TD Bank.

I ask John about those particular fintech sectors in focus in Switzerland, as well as the popularity of cryptocurrency among startups. The interview took place at Sibos 2015 in Singapore.

How was your experience at Sibos 2015? Did it feel different attending as a ‘thought leader’ rather than as a banker, as in previous years?

Sibos 2015 was very well organized (as usual), and the location/venue was excellent. Innotribe reached new heights with its world-class space on the main floor (wraparound screen, thought leaders, and so on). The experience as a speaker was similar to past years, given the Innotribe community is interactive and engaging. As a banker in past years, I found it a great way to rapidly gain cutting-edge insights and engage with peers. As a thought leader, Innotribe is an excellent platform to share your views with industry leaders, which was a lot of pressure, but also fun and rewarding.

Please briefly explain a little about Swiss FinteCH, the priorities for the organization, and the kind of initiatives currently in the works.

Swiss FinteCH (the Swiss Finance + Technology Association) is the hub for fintech in Switzerland, connecting the local ecosystem and linking it to the international community. We bring together various stakeholders (eg entrepreneurs, investors, professionals, mentors, public policy makers, media, and so on), work to address needs and opportunities, as well as act as a promotion platform. Specific engagement includes events, original thought leadership content, mentoring, and more to come in 2016. One example is the Swiss FinteCH Ecosystem Directory, which has reached a wide international audience online.

You equate wealth management startups as the prime focus for Switzerland as a fintech hub. Is that really true? Do you see Switzerland attracting attention from other fintech sectors?

The focus on wealth management comes from the competitive advantage of the Swiss Financial Centre as the leading global hub for such business. Another solid base for FinteCH is insurance and reinsurance. Aside from being the country with the highest insurance penetration, and home to leaders such as Zurich and SwissRe, the largest Swiss fintech funding round (CHF 16m) was earlier this week for an insurance startup called Knip, and others such as Anivo are coming up quickly. There are other themes we see, including blockchain/crypto, which is based on the legal frameworks here. Also interesting is ICT for finance (eg flipping banking secrecy into data security). Finally, we see strong potential with social finance and financial inclusion, based on world organizations (eg UN, WHO, and so on), the philanthropy and social finance flows through Switzerland, and the fact that this is a wealthy country that could look to the developing world for innovations.

Cryptocurrency seems to be another area of interest with Swiss startups. The Swiss Financial Market Supervisory Authority (Finma) even authorized a bitcoin exchange. What is your view on the future of bitcoin, and how can it integrate into traditional financial services models?

Blockchain is an exciting technology. There’s so much debate around the topic, but it seems increasingly clear it will have a significant impact in the medium- to long-term (rather than immediate disruption). What’s perhaps most interesting is how it was able to excite so many people about innovation in financial services (and beyond).

Is there a favorite fintech startup of yours, based in Switzerland, that you think the world should take note of?

There’s an increasing number of exciting fintech startups. A few of my personal favorites include Flynt (digital bank), Fractal Labs (digital CFO), Anivo (insurance comparison and advice), and Advanon (online invoice factoring).

What are the advantages of Swizerland as a fintech hub? Does London being an hour’s plane ride away represent a challenge?

London offers many opportunities in terms of the capital available, competitive ecosystem, and the example it has made for others fintech hubs. Switzerland has its own set of advantages. First is the stability and reliability in general (financial, legal, government, and so on), which continues to be a hard value for other locations to match. The existing financial services expertise remains another strong advantage (eg international banking, insurance, and so on). The other main point many cite is the incredible knowledge base and innovation capabilities (eg ETH and EPFL). If you look at topics such as artificial intelligence fintech, there are few locations that could rival Switzerland’s potential.

What do you think are the three major fintech trends that will have the most impact in 2016?

Regulation, which is a primary factor influencing everything and evolving differently in each location. Switzerland moves slowly, but has always had regulation as an advantage. Talk of a bubble and the need to convert hype and early stage investments into successful exits, financial returns, and impactful, lasting innovations. Insurance, which has been a bit behind, but has loads of potential to rival the more common banking and investing tech. We see all the Swiss corporates already doing work around the Internet of Things, digital business models, and so on. Given innovation is often developed in startups, there’s likely to be more action in 2016.

Image: Shaun Weston, All Rights Reserved

About the author

Devie Mohan

Devie Mohan is a fintech industry adviser and analyst based in London. She is the co-founder and CEO of Burnmark, a fintech research company, and is a panel member on the ING group Think Forward initiative on better financial decision making. Devie is actively involved in the fintech community and has been listed in CityAM's Top 10 Fintech Powerlist, and in Innotribe's Fintech Power Women list.

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