Lucerne University Study Shows Switzerland’s FinTech Market Grew By Over 60% Last Year
In the “IFZ FinTech Study 2019” published by the Lucerne University of Applied Sciences shows that the fintech market in Switzerland has grown by as much as 62% in 2018.
At the end of the year, Switzerland had 356 FinTech companies, which depicts a growth rate of 62 percent over the previous year. As shown by the rising number of employees and the capitalization of companies, the sector has also become more mature. On the other hand, the development in the traditional financial sector, where the number of institutions and employees are decreasing. The year 2018 was also a record year in terms of venture capital investment in the Swiss FinTech sector. They saw 68 rounds of funding in the year.
The research says:
“Overall, a total of $386 million was raised last year from 15 ICOs, a decrease in both the number and volume of this funding. The largest ICO in 2018 was Envion, which received approximately $100 million, followed by Nexo and SwissBorg with $52.5 and $50 million, respectively.”
Another finding of the study is that global innovation drives fintech companies forward. They have found a pattern in the report. The tech-driven FinTech companies, especially in the areas of Distributed Ledger Technology and Analytics, are mainly internationally oriented. The finance-driven FinTech companies, such as the Deposit & Lending or Payment sectors, are focusing more on the domestic market. This pattern can be seen in the local as well as in the international FinTech companies.
The study concludes by stating:
“The results of last year's study showed the path of the FinTech sector from hype to reality. This statement is confirmed this year by a further maturing and larger venture capital transactions. By contrast, the market for cryptocurrencies suffered a sharp correction. The FinTech market offered everything, depending on the segment and company.”
However, the publishers of the study do not expect the banks to be ousted by FinTech companies in the near future. The technologies will take over part of the services and processes of traditional banks unless the banks prepare themselves in time.