Building on a long tradition as a leading financial hub and top technical universities, the Greater Zurich Area offers ideal conditions for driving growth and innovations in fintech. Today, Greater Zurich is one of the leading fintech hubs in the world, on a par with Singapore and London.
10% of all European fintech enterprises are located in Switzerland, with 46% of them in Zurich. The region is one of the leading fintech hubs in Europe and worldwide. According to a recent study by the Institute for Financial Services Zug (IFZ) of the Lucerne University of Applied Sciences, Zurich has the second-largest potential worldwide for entrepreneurship, innovation and financial technologies - behind Singapore, but ahead of London, Amsterdam, New York City, San Francisco, Hong Kong, Frankfurt or Berlin. Switzerland is known to be one of the most stable countries in the world and thus offers the ideal environment for fintech companies which heavily rely on legal certainty – protection of property, data protection laws, confidentiality, state of the art technical infrastructure and ability to attract top talents locally and from abroad. The Swiss legal and political system is a major competitive advantage. In fact, fintech companies benefit from low corporate and individual tax rates, a favourable sandbox license for fintech start-ups, a high number of double tax treaties and approachable, pragmatic authorities. With the adoption of the new banking regulation and the implementation of a fintech license, Switzerland is also doing pioneering work: in future, market entry barriers for fintech companies will be reduced and the competitiveness of the Swiss financial center will be sustainably increased.
The fintech sector experienced strong growth in the year 2018. At the end of the year, Switzerland hosted 356 fintech companies, corresponding to a growth rate of 62 per cent compared to the previous year. The growth is contingent on distributed ledger technology (DLT) companies, representing a triple increase in number. More precisely, of the total of 356 companies, 122 are in DLTs. Judging by the increasing number of employees and capitalisations of the companies, the sector is also maturing. In contrast, developments in the traditional financial sector show a decreasing number of institutions and employees. (source: Lucerne School of Business, IFZ FinTech Study 2019).
From Zurich to the Grisons
The canton of Zurich alone is home to 15,000 offices of various banking institutions, leading research institutes and a cluster of entrepreneurs. A leading example of the prospering fintech development in Greater Zurich is the fast-growing fintech pioneer Leonteq. Within only 10 years the Zurich based investment solution platform experienced tremendous growth and success. Another success story with great momentum is the Grisons based fintech company Inventx, which developed a digital banking solution for financial institutions. Inventx employs meanwhile over 200 people and recently announced to invested 30 Million in its headquarter in Chur.
The Blockchain Revolution
The City of Zug in the Greater Zurich Area has now established itself as one of the global business locations for emerging Blockchain companies. In line with cryptographic use, the pioneers of Zug’s fintech scene have dubbed the region ‘Crypto Valley’. The fintech boom in Crypto Valley started when Bitcoin Suisse, Ethereum and Monetas were established in 2013. Numerous other companieswith international profiles such as Consensys, Lykke and Xapo have settled in the Greater Zurich Area since then. One of the biggest stakeholders in blockchain developments at the moment is Switzerland’s financial sector, which is one of the largest and most diverse in the world. Currently, SIX Group, the parent company of Switzerland’s Stock Exchange, is developing a fully-integrated trading infrastructure for digital assets using blockchain technology and relying on digital ledgers. Around the corner from SIX Group in Zurich, the blockchain incubator and accelerator Trust Square is expanding its location, offering 300 workstations to startups and researchers which makes Trust Square the world’s largest blockchain hub.
Read more about blockchain technology in the Grater Zurich Area.