“The world of banking faces an imminent revolution”, comments Florian Herzog, co-founder and CTO of the FinTech firm DEON Digital. He believes that start-ups from the FinTech sector boast huge potential to challenge traditional companies. In order to get to grips with ever more complex financial processing, the industry requires a high degree of transaction automation and digitalization.
Attractive to innovative players
This is where DEON Digitals takes action: using mathematical models, the company is developing a computer language to describe legal agreements within the financial sector, thereby producing contracts that are consistent and unambiguous in nature. “Contracts that are legible and executable for machines will be essential in the future”, according to Herzog, who adds: “To this end, you have to give technology a chance in finance”. New technologies in this area also enable start-ups to quickly compete with established large corporates. Thanks to its lack of bureaucracy for small and medium-sized enterprises (SMEs), the Greater Zurich Area is attractive to innovative players. “Greater Zurich attracts entrepreneurs who are ready to invest”, Herzog concludes.
Multi-faceted FinTech ecosystem with contemporary regulatory environment
Thomas Puschmann also sees the region as particularly productive. “The Greater Zurich Area is one of the few locations that combines every discipline”, comments the President of the Swiss Digital Trade Platform and founder of the Swiss Fintech Innovation Lab. “Alongside strong research activities that are well connected with industry, there is also a very liberal attitude among the population”. Puschmann is of the view that factors such as an interested environment represent the key to the region’s potent, cross-disciplinary innovative strength.
As is the case in other hotspots such as the UK and the USA, the Greater Zurich Area is likewise home to international stakeholders that form a diverse ecosystem. “However, Switzerland offers a better regulatory environment”, says Puschmann. Here, companies can benefit from a coordinated legal system and straightforward compliance with official requirements. Nevertheless, there is still potential for optimization in the area of financing start-ups, reducing the complexity of setting up a company and access to international personnel.
Students turned into entrepreneurs
In order to develop and exploit the huge potential of the FinTech sector, Puschmann established the Swiss Fintech Innovation Lab, which is based at the University of Zurich (UZH). Together with banking, insurance and regulatory partners, the object of this interdisciplinary research program is to examine digitalization solutions within the financial services industry. The program now cooperates with universities in Europe, the USA and across Asia as part of an international network. The latest international initiative with Stanford focuses on the interface between sustainability, digitalisation and financial services. “The Lab helps to turn students into entrepreneurs”, Puschmann explains.
Stability from innovative strength
Andi Burri is well aware of the value of well-educated graduates. The CEO of Loanboox, a debt capital market platform, emphasises that access to talent is of crucial importance. “At universities such as ETH, students receive an excellent education”, Burri says. His company Loanboox, which is located in Zurich, operates a leading brokerage platform for capital procurement between companies. In contrast to conventional brokers, the platform relies on total transparency across the whole capital procurement process, allowing the company to offer more efficient services at more affordable rates.
Loanboox benefits from the reputation of the Greater Zurich Area. “With a history of precision and innovation, the region is a magnet for talented people”, according to Burri. As an entrepreneur on the FinTech scene, he is looking towards the future with confidence. In Switzerland, awareness of the relevance of FinTech has increased sharply, which is important for a good regulatory environment over the long term. Burri is happily established in Greater Zurich – and it is all down to the stable ecosystem: “FinTech firms survive here longer than in other countries”, he states.
by Smilla Diener