Fintech: Impact, trends, and Helvetic trailblazers - #SwissTech Series
What is Fintech ?
Financial technology is the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. This industry aims to transform all aspects of financial transactions, leveraging technology. It is a dynamic field of technology, which has benefited from tremendous growth over the past decade, in particular in Switzerland, a country known for its financial institutions.
What impact do Fintech technologies have ?
Financial technologies can touch just about every aspect of our lives, from enabling a transaction between a brand and customers or between individuals. Providing a better access to credit, facilitating payments, expanding the reach of local initiatives, Fintech has the potential to impact most aspects of our lives. There are various fields for Fintech, and it is frequent to see the companies in this industry be divided into 4 categories: Investment Management, Banking Infrastructure, Deposit and lending, and Payments.
Beyond what these technologies do and enable us to do, they are also a growing industry actively hiring talents to continue its growth. Only looking at Switzerland, Lausanne and Zurich have been two vibrant scenes of Fintech, attracting talents from all over the world, and developing further the activity and local economy at the same time.
What are the latest trends ?
In the last 10 years, there has been swift growth in the Fintech industry, evolving through technological evolutions and new capabilities brought by improved computing speed, bandwidth, and access to new business models. As we close on 2021 and already look at 2022, here are te key trends we expect for next year:
Artificial Intelligence & robotics : while it has primarily been used for automation until now, we see developments of A.I applied to investments, compliance, risk management, loan processing, or credit management. As far as client service is concerned, we’re seeing more robo advisors used to boost the CX and efficiency of customer-facing teams.
Chatbots: to improve customer experience and provide a personalised service, Fintech companies have been investing in improving their chatbots experience, notably around NLP (Natural Language Processing).
Voice recognition: From authentication purposes to live interaction with the applications, Voice recognition and voice search have been widely adopted by users, thus enticing companies, to invest time and resources.
API: Application Programming Interface are programs enabling different technologies to function together. As the Fintech world moves towards a consolidation of platforms used and an integration of multiple services the development of APIs will significantly contribute to the development of the ecosystem. Initiatives such as the Open Bank Project only further reassure us that APIs will help shape the future of finance. As of early-2021, the initiative has over 11,000 software developers on board and over 350 different APIs available for use.
Blockchain: of course this technology is revolutionising the industry, through its most well known application - Crypto-currencies - but there is so much more to what this technology can do from a tokenisation standpoint, as well as from a security and trust point of view. Blockchain technology enables ultra-secure payments and transactions while eliminating any intermediaries, which significantly reduces costs. Future applications could include fraud reduction, trading automation, or independent client verification.
Finally, Banking-as-a-Service (Baas) - equivalent to SaaS but for providing banking services - has started to develop. One example is Solarisbank, which functions as a banking ecosystem for fintechs, banks, and digital-based companies. By using it, companies can make use of lending, digital banking, and instant credit modules, among other useful features.
Are there Swiss companies active in this field?
Absolutely! And they are leading global trends! Switzerland has a strong network to support the Fintech industry, with actors such as SwissFinTech.org and Swiss FinTE.ch, two associations dedicated to the promotion and development of this exciting field for innovation. Venture capitalist firms such as VentureLab also contribute to the ecosystem.
Let’s take a look at a few of the many Swiss trailblazers:
Adviscent : Based in Zurich, this company helps wealth managers interact in a meaningful way with their customers, making their advisory role more impactful.
Graypes: uses algorithms and AI to rate businesses and uncovers potential investments, thus saving time and money for investors.
Imburse: is a Payment-as-a-Service solution, which offers a single access point to the entire global payments ecosystem, from card collections, to debit orders, e-wallets, or push to card transactions.
Loanboox: is a debt financing platform, enabling both investors and borrowers in a simple, transparent and secure way.
Nexo: leverages blockchain to bring financial services to the world of digital assets. Buy, Borrow, or Exchange cryptocurrencies seamlessly and instantly through their technology.
Twint: The mobile payment system, enabling individuals and companies to instantly pay has soared in adoption over the past 3 years, and imposed itself as a household name.
Of course, there are hundreds more Swiss Fintech, but with such a vibrant scene, it would be impossible to represent every company at once. Our goal with this blog post series is to generate interest and curiosity, enticing you to keep exploring. A good resource if you would like to explore further is the Swiss Startup Ecosystem map, which we encourage you to go and explore.
If you feel we have left out a key example of Swiss Financial Tech, please do let us know in the comments.
Next up : Biotech
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