Zurich may not be at the top of the tech hub list in Europe just yet, but it surely aspires to be. Banking and finance are key industries within Switzerland, and the country’s reputation for a competitive economy may make it the perfect breeding ground for FinTech greatness.
In this week’s edition of PYMNTS’ Weekly Tech Center Roundup, we take our first trip to Switzerland to see how the country’s largest city is looking to make a huge impact in the global FinTech scene.
Before we jump into the post, here are a few quick facts about Switzerland and its tech scene:
- Switzerland’s population is estimated to be approximately 9 million.
- Zurich is the country’s largest city and has landed in the top three of Mercer’s ranking of most livable cities.
- Switzerland has a GDP of roughly $665 billion.
- The nation has been recognized as one of the most innovative and competitive economies in the world.
- With its well-known reputation for valuing data privacy and strict privacy laws, Switzerland has become an attractive hub for companies to house their servers and customer data.
- The country is home to 15 Fortune 500 companies and hundreds of European and EMEA headquarter offices.
- In 2014, Swiss startups attracted 450 million francs (approximately $466 million) of venture capital.
- There are approximately 190 startups in Switzerland.
Zurich’s Recipe For Success
For the eighth year in a row, Switzerland has topped the World Economic Forum (WEF) Global Competitiveness Report for having the most competitive economy in the world. The country received high marks across 11 categories, including innovation, technological readiness, business sophistication and labor market efficiency.
“Switzerland arguably possesses one of the world’s most fertile innovation ecosystems,” the report states, adding that companies within the nation have “an unmatched capacity to attract the best talent and large multinationals.”
As the largest city in Switzerland, Zurich is an innovation hotspot that many believe is on the fast track to become a standout European tech hub.
According to StartUs Magazine, Zurich has a unique blend of livability, finance and innovation that not only make it ripe for entrepreneurial success but also provides it with the potential to reshape the finance industry altogether.
Among its attributes, the city boasts a high-tech ecosystem, availability to capital, a high quality of life, bureaucratic efficiency and a top location in the heart of Europe.
A recent report from Ernst & Young recognized Switzerland for having a sound approach to digitization, stating the country is well ahead of the pack when it comes to investment and having a positive outlook in the digital technology space.
Sparking Innovation Through Collaboration
The two financial institutions are working with telecoms group Swisscom and retailer Migros, as well as other local firms, to invest in and launch the Kickstart accelerator, Financial Times reported. The goal of the accelerator is to help an initial 30 startups across 19 countries pursue work in areas such as FinTech, robotics and drones.
“We want Switzerland to be ready for the future,” Salvatore Iacangelo, head of digital transformation at Credit Suisse, told FT.
“It’s not about trying to ringfence and keep competitors out. The goal is to establish the world’s financial center also as a FinTech center, and as a consequence, everybody wants to join forces.”
“This is a mentality we need to import, making Zurich attractive for entrepreneurs,” Iacangelo added.
The selected startups will spend 11 weeks in Zurich to focus on digital technologies and work with larger companies.
“This could well serve as a new model of promoting startups and proving the viability of their business,” Andreas Kubli, group managing director at UBS Switzerland, explained.
The concept of working together to establish greater FinTech innovation is also taking place on a global level in Switzerland.
The Monetary Authority of Singapore (MAS) and the Swiss Financial Market Supervisory Authority (FINMA) announced that they are partnering to foster more FinTech cooperation between the countries.
The agreement will support the sharing of information, the support of financial innovators, more dialogue between the nations and addressing any regulatory hurdles, Banking Technology reported.
Both nations are already known for maintaining strong global finance industries and being very active in FinTech, which makes the collaboration a natural move.
FINMA said its “FinTech Desk” will serve as a single point of contact for both countries and that a dedicated contact person will be available during any pre-authorization and/or authorization processes. The organization also stated it will support any FinTech innovator, regardless of whether they reside in Switzerland or not.
The initiative began during the second annual meeting of MAS and the State Secretariat for International Finance, where both sides conducted a financial dialogue that aimed to “deepen bilateral cooperation and exchange views on domestic and international financial market developments and policies.”