Happy Birthday Switzerland: Searching for Crypto in Valleys and Alps


Image courtesy Eiger Hotel

Today is Swiss National Day, so although Daily Fintech is a global business and we do not take sides in the Fintech Capital of the world debate, today is a day to celebrate all things Swiss. First, a personal note, I chose to live here for family and lifestyle reasons and love being in Switzerland. The country is almost perfect, which makes it a lousy laboratory for startup experiments; entrepreneurs want problems to solve and so an almost perfect place is terrible. Switzerland is only # 19 in nominal GDP ranking and you would not describe the consumers here as early adopters.

However Switzerland is a great location for a global business (such as Daily Fintech Advisers).

Last year I wrote about the opportunity for Switzerland to take the lead in financial transparency for investors. While there are many interesting initiatives, progress has been disappointing. The core of the wealth management business has seen little change in a year.

SIBOS this year is in Geneva in lateSeptember. 8,000 bankers and their vendors flying in for 4 days. See y’all there. The last time it was in Switzerland was 2002 and before that 1993, very different eras. Last year while writing the Swiss Fintech birthday post, I was getting ready to moderate a session at SIBOS in Singapore (what many call the Switzerland of Asia) on Fintech Hubs. This year, we are in a post Brexit landscape where the Brits are looking to Switzerland to understand how to navigate the global economy as an independent country.

Crypto Valley

The confluence of expertise around Zurich and Zug has turned into a real ecosystem with bankers and crypto guys mixing easily and cooking up game-changing plans. Plus the regulatory environment is good (Switzerland has strong privacy and data protection laws and is formally a multi-currency country thanks to the strange history of the WIR). These were big factors in Xapo moving from Silicon Valley to Zurich and Ethereum setting up its Foundation in Zug. Oh and Zug has the biggest concentration of Family Office wealth in the world.

You can see some of the Crypto Valley leaders here.

These are global ventures that just use Switzerland as a base.

People here talk a lot about the lack of VC. I do not think it is a big deal where the venture funding is located. Capital flows to innovation. If it temporarily flows the other way, you can be confident that will change. Today we have that temporary dislocation, where Swiss investors fly to London to meet Swiss entrepreneurs to do a deal. With all those great Swiss hotels, one assumes that a congenial meeting place could be found within the country!

Is diversity a strength or a weakness?

There are now a reasonable number of Swiss Fintech startups as this recently published list shows.

The number of Fintech and Finserv associations, networks and accelerators has grown a lot in the last year. This diversity can be a weakness. If you fly into Switzerland for a day, who do you go and see? More basically, where do you go – Zurich or Geneva or maybe even Bern (seat of Govt and regulator)? If you go to London or Luxembourg, it is much easier – only one city and the techies and the bankers and the regulators are all there. However diversity can be a strength – innovation usually emerges from that messy brew called free markets. Somebody asked me which one of the associations, networks and accelerators was the “official” one. I looked at the person blankly, because there is no official one and I don’t think that matters.

I do still think that financial transparency for investors, based on rigorous engineering, will be the Swiss financial brand that scores big. It may use Blockchain technology and other technology to get there.

In the meantime, I am heading out into those lovely Alps (where I do not expect to see any crypto, that stays in the valleys for now).

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Bernard Lunn is a Fintech thought-leader.

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