The Fintech Scene in Switzerland

The young upstarts

Fintech isn’t limited to the showplaces in London, Berlin, Singapore and San Francisco. Almost 200 fintech companies, from start-ups to renowned vendors of banking software, are based in Switzerland.

Urs Binder

Zug doesn’t only appeal to lovers of cherry gateau and for commodity traders. The area around the canton’s administrative centre also exerts a special attraction on young new companies whose endeavours are focussed on the digital future of the financial sector. More than 20 fintech start-ups have meanwhile set up shop in the canton, which is renowned for being pro-business. This includes the world’s largest concentration of companies currently dedicating their efforts to advancing the development of blockchain technology, which is considered revolutionary. Having joined forces with established players such as Crypto, a world market leader in encryption, a veritable “Cryptovalley” has now been built up – and fittingly, Bitcoins were recently introduced as a payment option for government services in Zug.


The “Fintech Start-up Map” produced by the digital banking think-tank eForesight currently counts 185 fintech start-ups across all of Switzerland. Apart from Zug, the greatest concentration can be found in Zurich; however, Geneva can also hold its own. Events ranging from “Finance 2.0” to the “Swiss FinTech Award” and the “International Money-Tech” are bringing start-ups, investors and financial services providers together. A whole range of online media are also focussing on fintech, and the topic has also become an integral part of daily press reports. Fintech has definitely arrived in Switzerland.


Four highly promising approaches

It is, obviously, impossible to cover each and every interesting fintech company here. However, four examples should be able to illustrate the diversity: Monetas, Ethereum, Contovista and Descartes Finance exemplify the different areas of application and approaches for how digitalisation and software can turn the financial sector on its head.



Johann Gevers, who hails from South Africa, intends to make the financial system fairer: At the moment, it is extremely decentralised, with the majority of the world’s population unable to make use of it. For example, more than 80 percent of Africans do not have a bank account. These people are excluded from trading opportunities, at best only able to do business with their personal circle of acquaintances.


Monetas, which is based in Zug, will allow Johann Gevers and his team to change this state of affairs. The Monetas platform is based on cryptofinancial technology, and makes the transfer of money and other assets “unbelievably secure, fast and inexpensive,” according to the company’s mission statement. In contrast to digital currencies such as Bitcoin, which is based on a public blockchain with a relatively slow processing speed and high transaction costs, Monetas operates using a “digital notary public”, a contract platform that swiftly finalises transactions with no risk of manipulation using a deterministic procedure, and along with digital cash, can also handle contracts of all types. Monetas successfully completed a proof-of-concept with the Tunisian Post in autumn 2015, with pilot projects involving real money now to follow. Monetas is currently directing its primary focus on the African market, and intends to start operations there by working together with 12 national banks that can pay out digital money using the platform. This involves a wallet for the mobile phone, which allows the digital money to be held securely and allows direct transfers to other members to be made. Because even if most people in Africa don’t have a bank account: Many have a mobile phone to use.


Monetas is currently moving through its fourth round of investment, totalling more than CHF 15 million. Having already brought international angel investors on board, it now intends to attract more strategic investors from Switzerland, as Vitus Ammann, head of marketing, underlines. As the winner of the Swisscom StartUp Challenge 2015, the company has every chance of doing so.



Vitalik Buterin was born in Russia in 1994, and emigrated to Canada with his parents in 2000. He was already programming in C++ at the age of 10. When Bitcoin (BTC) became a hot topic in 2009, Buterin was fascinated by it, and started an intensive study of blockchain technology, developing it with a focus on a blockchain-based software platform that would not only allow cryptocurrencies to be realised, but also any number of distributed applications, known as “Dapps” (decentralised apps) in the form of so-called “Smart Contracts”. This is used as a basis for setting up decentralised, fully autonomous organisations (DAOs). Economist and author Hannes Grassegger speaks of a “company without people”. Buterin described this platform, which he named “Ethereum”, for the first time in 2013 in a white paper.


Ethereum started operating in July 2015. Its own cryptocurrency, “Ether” (ETH) has meanwhile reached a market capitalisation of almost US$ 860 million. Buterin decided to bank on crowdfunding for his initial financing: The very first Ether generated were sold for Bitcoins. This advance sale yielded the equivalent of more than $ 18 million.


The Ethereum Foundation, with headquarters in Baar, is working on continuing its development. Buterin and his core team have set up shop in a modern villa named “Holon 000” in Baar. The rest of the Ethereum developers are spread across the entire globe.


Ethereum is, to date, primarily focussed on developers. The vision maintained by the Ethereum Foundation is a second-generation blockchain, a “world computer”, the first “zero-infrastructure platform”. This might be described as rather ethereal, to use the jargon. However, the financial world has realised its disruptive potential, and regularly invites Buterin to presentations and, in a joint venture called R3 involving 45 financial services providers, including UBS, they are studying the technology in detail, along with the consequences of the blockchain, with a central focus being placed on the Ethereum technology.




Contovista initially intended to go into competition with banks, however the company directed by Gian Reto A Porta is now working in close cooperation with them. Contovista offers bank customers an innovative way of viewing their finances, be this by means of classic online banking using a browser, or on a smartphone. The co-founder of the company worked as a consultant to numerous banks before becoming an entrepreneur, having obtained extensive knowledge of core banking systems and banking business processes. The core team of the Schlieren-based fintech start-up now comprises 14 employees.


The Contovista solution uses its “intelligent account statement”, which automatically categorises payments and provides a semantic search function, along with diverse personal finance management functions. This makes obtaining an overview of finances and budgetary controls much more straightforward and convenient. According to Contovista, this boosts customer loyalty, and allows the bank to position itself as an innovative service provider. The modules used by the solution can be easily integrated into existing web frontends by importing a JavaScript file.


However, there’s a lot more to it: An analytics engine provides the banks with conclusive information for business analyses and marketing on the basis of the account data of their customers. Interfaces make the development of individual applications that operate using the Contovista data possible.


The company, which was founded in 2013, has been able to impress a variety of banks with its solution, including the ZKB and Finnova-based banks such as the Schwyzer Kantonalbank. The Aduno Group acquired a 14 percent share in Contovista AG in March 2016. Contovista is one of the few fintech start-ups already operating profitably. The course is clear for its CEO: “For international growth, we need to continue expanding our team. We can now expedite this thanks to the round of financing.”



Descartes Finance

For board member Rino Borini, the Zug-based Descartes Finance AG, founded in 2015, has developed a “digital investment platform (the buzzword here being Robo advisor) which is setting completely new standards in wealth management – the world has seen nothing like this before”. Company founder Adriano B. Lucatelli has proved that the founder of a start-up company doesn’t necessarily have to be 20 years old: The 50-year old used to work at Credit Suisse and the UBS, among others, and, as a financial market specialist, is a lecturer at the University of Zurich. Lucatelli would like to use his solution, which is based on scientific findings, to make it easier to invest intelligently, as he stated in the introduction to the presentation he held at Finovate 2016 in London.


The functions of this wealth management platform extend far beyond what robo advisors have been able to offer to date: Descartes allows the customer to choose between different asset management philosophies, “be it the classic mean-variance model according to Markovitz, or minimum-variance and so on...” In future, Descartes intends to offer the most diverse investment strategies possible, ones which have prevailed scientifically and in practice, and which can be modelled using an algorithm. The customer can have a portfolio managed automatically, or take a proactive role, and choose between the different strategies and products on offer. This will make Descartes the “iTunes of wealth management”, as Lucatelli maintains. “In just one minute, you can put together a truly global and sustainable portfolio that can be rebalanced at any time, be it automatically or manually.” Descartes is not a one size fits all solution with predefined portfolio models.


Those who wish to invest with Descartes must have at least CHF 50,000 at their disposal. The actual portfolio management is taken care of by its partners, UBS and Vontobel. The asset management companies Lakefield and OLZ are also on board, along with the ETF specialist iShares from BlackRock.


Benefits versus sex appeal

“Fintech should primarily focus on providing customer benefits and added value,” as investor Marc P. Bernegger states. The relevant business cases are often rather unspectacular, and don’t offer a lot of excitement. Specific solutions to problems are needed, and not “another app that looks like a lot of fun, but which no-one really needs”.

“Specific solutions to problems are needed, and not another fun app.”

Marc P. Bernegger, serial web entrepreneur and fintech investor

A recognisable benefit is clearly provided by three of the start-ups described here, and Ethereum is acknowledged as having an enormous potential for the future – not as a profitable company, but rather as a revolutionary technology. Highly promising fintech companies often work in the background. Examples include online services for bookkeeping such as RunMyAccounts, financial services providers such as Advanon or the digital insurance broker Knip, which has managed to turn the otherwise rather dull topic of insurance policies into a hot topic for consumers. Fintech companies that have long since moved on from the start-up phase demonstrate what really matters: Avalog and Leonteq are good examples of successful fintechs. Many other companies that seem interesting at the first glance will, in contrast, fail to survive, having never managed to reach a critical size. And even if this revolution radiates a high level of sex appeal: Previous experience has shown that those fintechs that do not try to compete with banks and insurance companies, but rather work together with financial services providers, have an advantage.



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