Andreas Iten is the CEO and co-founder of Tenity. Andreas originally worked as the Chief Information Officer for the division of financial information at SIX, where Tenity was born. He also co-founded SIXHackathon (Europe’s largest fintech coding contest) and today holds several board seats at fast-growing fintech companies.
What’s the history behind the fintech ecosystem in Switzerland? And if you work for a company that’s thinking of setting up in Switzerland, why or why not should you move here? What type of people and companies is Switzerland best for?
I myself am from Switzerland, and before I moved into the startup and venture capital space, I was working at the Swiss Stock Exchange, SIX. I now work as the CEO of Tenity, an open innovation ecosystem where we run accelerator programs, connect fintech companies with corporates and invest in startups. Our HQ is also in Zurich, Switzerland.
Based on my experience working in financial services in Switzerland and our work at Tenity, here’s what I’ll cover in this article:
Note: want to learn more about what we do at Tenity? Reach out to see how we could help you.
Here are some key bits of information about the fintech ecosystem in Switzerland:
There are currently over 400 fintech companies in Switzerland, primarily in these verticals1:
A few other statistics are:
This graph breaks down how much capital was invested in various sectors in 20223:
It’ll come as a surprise to no one that Switzerland has a legacy and tradition as a financial hub. For hundreds of years, Switzerland has been known for wealth management. Switzerland started the automatic exchange of data on account holders in October 2018, officially marking the end of Swiss banking secrecy, due to pressure from various countries – however Switzerland is still a wealth management and fintech hub.
In 2015, the Swiss regulator, FINMA, started putting in place initiatives to kickstart the fintech ecosystem by helping create better conditions for fintech companies. This helped grow the fintech and crypto movement, which in turn helped develop technologies like blockchain and various crypto assets. Since then, Switzerland is known for its European crypto valley in Zug.
Although the country no longer has the banking secrecy it used to, there still remains a high level of trust between locals and the banks. Switzerland is known as a stable, reliable country with advanced infrastructure that has a lot of expertise in wealth management, privacy and specific technologies in crypto.
In 2023, Switzerland is great for innovative wealth management and crypto solutions, but it remains a small market for retail fintech business models. Because it’s a small market, B2C companies have to expand to other countries very quickly and many companies end up exporting their technology solutions.
Due to Switzerland’s background in wealth management and historic domination of banks, it’s easier to find an expert who understands banking very well.
If you work at a fintech company that requires team members who understand banking and the challenges well, it’s relatively easy to find someone who’s worked at a bank for 10+ years and knows the banking world inside out. For example, at Tenity, almost every team member has spent a considerable amount of time working at a financial institution.
This is especially useful if you’re looking to sell tech products and solutions to banks. People with a background in banking know the problems banks face inside out, and understand how it can be done differently.
Banking aside, there’s also access to great talent in Switzerland via the universities. Many students come from abroad to study at our universities, which makes it a good place to look for talented graduates.
In 2015, FINMA developed the “fintech license”, a license which allows fintech companies to operate like banks without having to meet the same requirements. With a fintech license, the company doesn’t need to adhere to strict banking equity ratio or liquidity requirements. They can also accept deposits of up to CHF100 million from the public without requiring a commercial banking license.
FINMA has also created a sandbox where companies can accept public deposits of up to CHF1 million without getting a banking or even a fintech license.
The fintech-friendly regulatory environment makes it a lot easier for fintech companies to get set up and operate, as well as experiment and test with new technologies.
Switzerland actively regulates crypto, providing a regulated framework for companies in the crypto industry. Clear regulations attract investors, foster growth, and ensure long-term stability in the crypto market. Switzerland has a positive attitude towards blockchain and cryptocurrency technology
Switzerland is also a stable country with a strong currency and low inflation. Young companies based in Switzerland don’t need to deal with instability and political issues that other countries may have in order to operate.
Europe’s crypto valley is in Zug, 30 min by train from Zurich. The crypto valley has attracted a lot of local as well as international talent. For fintech companies operating in the crypto space, there’s a lot of good access to crypto and blockchain specialists.
Like the entire cryptocurrency industry, crypto companies in Switzerland were affected by the FTX scandal in 2022. However, with Switzerland's reputation as a stable and reliable state, it’s possible the industry isn’t as badly affected as in other countries.
Having said that, Switzerland is a small market, which means companies based here need to scale to other markets very early – especially those that are B2C. The growth potential can be limiting, although it does depend on your business model.
So far, fintech in Switzerland has been following other global trends. In 2023, like in other countries, we’re seeing a slowdown in capital funding and fewer raises from fintech companies.
But that doesn’t mean there’s no activity. Although I do believe the times of the Wild West are over in Switzerland, our regulatory framework enables a lot of experimentation and testing. For example, I’m seeing a large increase in artificial intelligence adoption, with banks using this time to figure out how to implement AI into their customer journeys, improve their legacy environments or systems.
With blockchain and the crypto movement maturing, there’s a large decentralised finance environment, with crypto companies moving less towards speculations and more towards real use cases.
In general, there’s a new generation of fintech startups that are more mature, and that have the backing of established financial institutions or technology companies. I believe we’ll see more of this in the coming years and more companies turning to Switzerland for its stable regulatory and political environment.
Some of the older, more established fintech companies include:
Some of the newer, yet mature startups are:
Tenity started out as an open innovation program which I was leading at SIX in 2015. A few years later, we spun out as an independent organisation. Now, we’ve been running accelerators and working at the intersection of fintech and innovation ever since then.
SIX is owned by all the Swiss banks, which makes it the infrastructure of the financial services ecosystem in Switzerland. This meant that right from the beginning, we’ve been on par with the orchestrators.
Specifically, what we do includes:
As the only Venture Capital fund in Switzerland focused on financial technology and our background with corporates, we’ve played a large part in connecting the fintech ecosystem since FINMA brought out the first fintech licence in 2015.
This has allowed us to stay on top of fintech trends, enable match-making between the right companies and people and have the resources to help the financial industry grow over time.
When a startup joins one of our programmes, we usually exchange a certain investment for a percentage in their startup, which is then part of our investment fund. Corporate partners can then choose to invest in this fund and get a financial ROI.
By taking part in our programmes, startups have access to 200+ mentors, an investor network, resources and coaches that offer guidance on raising money, finding product market fit and hiring.
Corporates that invest in our fund automatically get invested in 300+ startups. This allows them to take advantage of the law of large numbers: by investing in a lot of different startups at once, the likelihood of getting an ROI is a lot higher.
For example, in 2019, PXL Vision, a fintech startup that graduated from our Tenity Incubation Program, raised a CHF 4.6m seed round in 2020 led by SIX Fintech Ventures. This was possible because SIX Fintech Ventures, one of our partners, was vetting early-stage startups throughout the program and decided to invest in the startup after it graduated. Since then, PXL Vision has become a leading automated identity verification provider in Switzerland.
For more information on how you can invest with Tenity, check out our Investor page.
Twice per year, we run our own incubation program for startups. We also run bespoke corporate accelerator programs for our corporate partners. You can see those that are live in 2023 in Switzerland here: Startup Programs
Because we run one of the few fintech incubators in the country, we’re able to see first hand the startups and the technologies that are taking place in the country. See an example below of this in practice.
Corporates also join these programs to help meet the startups and look for partnership, collaboration or acquisition opportunities. These regular programs enable regular dealflow for corporate VCs.
A great example of two Swiss based companies that have collaborated via one of our programs is Julius Baer and vestr.
Vestr is a digital platform that connects issuers, asset managers and service providers, helping companies move away from spreadsheets, phone calls and emails to a more digital process and platform.
In 2017, via one of our incubators, vestr met with Julius Baer and started the first partnership focused on digitising Actively Managed Certificates (AMCs).
Fast forward to 2023, and today, vestr:
By collaborating, Julius Baer was able to access a team with highly specialised knowledge and ready-to-use, market-tested product without having to wait for a long development cycle. Vestr has seen impressive growth and the partnership helped them increase penetration into the market while also finding innovative ways to develop AMCs.
You can read the full story here: How Julius Baer and vestr successfully built a platform to digitise AMCs
Switzerland is a great place for a fintech company if you’re looking for banking talent, want a strong regulatory framework and a stable country. It also helps if you’re focused on wealth management or fintech.
At Tenity, we’re one of the main orchestrators of the ecosystem, and feel privileged to see first hand innovation within fintech and financial services.
If you’d like to learn more about what we do at Tenity, reach out to learn more about how we can help you.