The digitization of the financial sector is a key challenge for the Swiss economy. Stephanie Wickihalder, President of Swiss Fintech Innovations, discusses the sector's strong potential for innovation and the benefits of certain tools for SMEs.
Switzerland's fintech sector is rapidly evolving. According to the latest study by the Lucerne University of Applied Sciences (HSLU), the number of companies in the sector reached 483 in 2023, marking an 11% increase from 2022. Fintechs focused on sustainability showed particularly strong growth, expanding by 50% in 2023 and now accounting for 10% of all companies in the industry.
The development of accounting and reporting tools like Klara and Bexio, along with online neobanks such as Neon, is driving the growth of digital financial technology solutions. For SMEs, fintechs offer a way to boost efficiency and cut costs. Stephanie Wickihalder, President of Swiss Fintech Innovations, highlights the areas where this technology has already demonstrated its value and the challenges Swiss fintechs are currently facing.
What is the mission of the Swiss Fintech Innovations (SFTI) association?
Stephanie Wickihalder: SFTI brings together nearly 30 players from the financial sector, aiming to promote collaboration and innovation in Swiss financial services, primarily through creating working groups. Technically, the association handles the standardization and maintenance of APIs (Application Programming Interfaces) for services like payments, account information access, mortgage management, credit cards, and pensions. Standardization is vital for developing innovative financial products and services that can seamlessly interact with existing systems. It's a key requirement for fintechs to offer their services to SMEs through partner banks.
How can SMEs benefit from the services offered by Swiss fintechs?
Wickihalder: The key advantage fintechs provide today is the ability to automate administrative processes. Tasks like compliance, reporting, accounting, and fraud detection can be resource-intensive. Additionally, SMEs that lack the in-house staff for these tasks often need to hire external partners, which can be costly. Fintechs aim to deliver products and services of equal or higher quality than traditional providers, but at a lower cost and with a more user-friendly interface.
Companies can also benefit from the growing collaboration between fintechs and traditional banks, making it easier to manage their assets. For example, SFTI recently released a summary report suggesting the digitization of retirement asset data. The aim is to allow Swiss residents to access this data anytime, improving how they manage and organize their finances.
In 2023, companies focused on sustainable finance grew faster than others. How can this success be explained?
Wickihalder: Environmental concerns and regulatory requirements are fueling the rise of fintechs. These companies are well-equipped to offer practical solutions, especially by improving transparency and streamlining sustainability reporting.
Environmental issues have become a growing priority for businesses and consumers alike, prompting many investors to move away from investments seen as harmful and instead focus on ESG-certified (Environmental, Social, and Governance) options. Fintech plays a vital role in this shift, especially in developing international standards that establish the criteria needed to make the global economy greener.
The fintech sector continued to grow in 2023, but at a slower rate than in 2022. What factors explain this slowdown?
Wickihalder: The market remains largely dynamic. In the early 2020s, cryptocurrencies played a major role in boosting the number of active fintech companies. However, the sector faced challenges toward the end of 2022, which slightly dampened demand for these services. Furthermore, multibanking – a digital solution that enables individuals to manage all their bank accounts through a single app – offers a promising growth opportunity for both fintechs and traditional banks.
What is the biggest challenge fintechs will face in 2024?
Wickihalder: The key challenge now is securing funding. While monetary policy has eased slightly in recent months, it remains fairly restrictive, which raises the cost of investments. Fintechs, however, need capital to scale their operations to the next level.
Biography
Stephanie Wickihalder has been involved in finance for 20 years, with experience in investment banking, wealth management, and digitalization. Since 2017, she has been the president of Swiss Fintech Innovations (SFTI), an association that brings together leading figures in the digitalization of banking, insurance, technology, and consulting in Switzerland. She also holds several advisory and board roles in the fintech sector. In addition, she is the Deputy CEO of the Liechtenstein Bankers Association and a guest lecturer at the University of Zurich and the Zurich University of Applied Sciences in Business Administration (HWZ).
In discussion
Last modification 18.09.2024
