There has been no change at the top in the rankings of fintech hubs worldwide compiled for a study by the Institute of Financial Services Zug (IFZ) at the Lucerne University of Applied Sciences and Arts (HSLU). Singapore is once again ahead of Zurich and Geneva. London, Amsterdam and Toronto follow. This year, the HSLU presented its fourth IFZ FinTech Study.
According to a press release from the university, this sector has experienced strong growth in Switzerland over the past year. At the end of 2018, there were 356 fintech companies in Switzerland, corresponding to an increase of 62 percent on the previous year. “Judging by the increasing number of employees and capitalizations of the companies, the sector is also maturing,” reported the HSLU. However, the number of institutions and employees in the traditional financial sector has declined.
The HSLU highlighted the special situation for Switzerland as an innovation center. Both nationally and internationally, it is evident that fintechs whose expertise lies predominantly in the area of technology mainly have an international orientation. Conversely, finance-driven fintech companies set their focus on the domestic market. “The financial industry needs solutions that are both reliable and interpretable” for businesses and users rather than “exotic technologies”. This presents opportunities for Switzerland.
According to the study, changes are still to be expected in the sector. The cryptocurrency market has already suffered from significant corrections. Although the authors do not expect fintech companies to replace banks, traditional banks do need to position themselves differently or risk that they “become irrelevant”.