Switzerland's potential as a European fintech hub is being damaged by lack of Government and bank support and a shortage of investment capital, according to a new report by Ernst & Young and Swiss Finance + Technology Association.
Despite the advantages incurred by the country's skilled labour markets, competitive tax rates and economic stability, Switzerland is lagging other major economies in supporting early-stage startups, states the report.
The authors point to other major hubs in London, Singapore and New York, where strong govrnment support has helped the fintech ecosystem to flourish and act as a spur for entrepreneurial ambition and fund raising.
“Generally, Switzerland has large holdings of cash that could be used for funding,” the document reads. “However, Switzerland’s VC and incubator landscape is still at an early stage of development. Switzerland has raised about one third of the VC that London has. On top of that, the Swiss Government and the large established financial institutions lack commitment to provide financial support.”
Recent private sector initiatives include the creation of the Fusion, SIX Group and Nexussquared accelerator programmes. Among the domestic banks, UBS has been the most active, running startup competitions and launching its Y Think Tank programme at BlueLion incubator to muse on the future of technological innovation in financial services.
The report concludes with a call to action for the regional governments to give their full backing to these promising early initiatives: “By further exploiting the huge potential available in Switzerland, providing financing and possibilities to connect at conferences and additional initiatives, Swiss FinTech startups can capture the opportunities ahead and build on Switzerland’s long-standing tradition as an innovation leader and a central hub for financial services globally.”
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