“FinTech is a phenomenon that will not disappear anymore but further accelerate, so either we’re part of it, or not. If the FinTech opportunity, however, is missed, the Swiss financial market, and as a consequence the Swiss economy, too, will lose traction, international importance, and jobs.”
Leonteq is certainly a lighthouse example of Swiss startup stories. We had the opportunity to talk to Founder & CEO Jan Schoch, a true fintech pioneer and entrepreneur at heart.
What was the FinTech scene like in Switzerland when you started it in 2007? And how has it changed since then?
Back in 2007 when we launched Leonteq, there was no such thing as a FinTech scene, the term FinTech as such was not even used. No FinTech associations, barely incubation and acceleration programs, hardly conferences or awards – at least none dedicated to FinTech. It was just my co-founders and myself being convinced that technology and a digital platform can greatly enhance processes in financial services in terms of costs, speed, independence, transparency and customer experience. These are still today the core pillars behind Leonteq’s business model in today’s vivid FinTech ecosystem, in which we are considered a FinTech pioneer, a leading B2B solution provider and an established former startup which made it to a unicorn. Today Switzerland has many FinTech organizations and a lot of attention from corporates and academia in terms of incubation and acceleration programs, and of course we as Leonteq actively engage and try to give something back for the benefit of all of us, recently founded and more established FinTech firms.
Did you ever think about leaving Switzerland and why or why not?
Both Leonteq and myself have very strong roots in Switzerland. We have not considered leaving Switzerland, however, I know various Startups which have considered moving to London for better startup conditions, despite the Brexit-induced uncertainty. Switzerland has a strong tradition as a financial hub, some of the best universities, top talent and relatively high economic and political stability. From here, we can serve our customers well, also in the future. That said, we will of course continue to grow in other markets, too, and will establish further international offices where it makes sense. But our heritage and base will always be in Switzerland.
Switzerland is not among the top players when it comes to FinTechs and startups, what are the reasons? And why is it so difficult to catch up with London, Singapore or even Berlin?
Switzerland indeed is currently trailing other FinTech hubs, reasons being cost of living and opportunity costs for founders in terms of salaries but also more home-made hurdles like not enough liberate startup- and FinTech- regulation and taxation schemes, somewhat restricted access to foreign talents and a less developed failure-/startup mentality. All these aspects can be changed only slowly but we’re trying hard to catch up with other FinTech hubs to safeguard the future of Switzerland as a financial center.
Banking and finance are depending on trust, knowhow, tradition, and stability – why are startups important in this sector? What can startups achieve that e.g. banks cannot?
In light of the digitization mega-trend which we consider an irrevocable tectonic plate movement that changes financial services in terms of processes and customers’ expectations forever, it is vital to continuously innovate and to stay at the forefront of technological developments. Startups are important to drive innovation and to help the ecosystem, including traditional financial services firms, to innovate and constantly advance processes and most importantly customer experiences. Startups, which often only focus on certain steps of the financial services value chain, are suited well to increase efficiency, speed and customer experience and therefore improve the overall value chain, if coordinated well with the rest of the value chain.
Banking and finance are the key pillars of the Swiss economy, what do you think will happen when Switzerland misses the FinTech chance? Let’s say, we leave it as it is, Switzerland in 10 years from now, what do you think will it look like?
If Switzerland misses the FinTech train, we will be left behind others, especially those who currently drive the train like Singapore, Berlin, and other FinTech hubs. FinTech is a phenomenon that will not disappear anymore but further accelerate, so either we’re part of it, or not. If the FinTech opportunity, however, is missed, the Swiss financial market, and as a consequence the Swiss economy, too, will lose traction, international importance, and jobs. About 100’000 directly related jobs in the finance industry could not be covered out of Switzerland anymore, so there is a lot at stake when it comes to jumping on or missing the FinTech train.
Leonteq is hardly a startup anymore? Why do you support Swiss Finance Startups?
Leonteq is still a young firm and considers itself a FinTech pioneer and established former startup. Today we are seen as a leading B2B FinTech firm. We grew a lot over the last years and have enjoyed huge success. At the same time we have faced many challenges and learned our lessons along the way so we believe the current generation of FinTech founders can benefit from our experiences and support when it comes to connecting and advancing the FinTech ecosystem. Through supporting SFS in Switzerland, we feel well positioned to achieve this together.
You have recently founded the Global FinTech Association, what are your goals with this initiative?
We created the Global FinTech Association, or GFA, to coordinate the industry’s needs and challenges on a global scale in order to achieve true global impact and to jointly advance the global FinTech ecosystem. Although there are local and even national FinTech organizations like SFS already out there, we felt that adding an international coordination layer on top that connects FinTech firms and organizations internationally would be very helpful. When it comes to networking and learning, establishing a collaborative offering, organizing funding and facilitating a stakeholder dialogue, taking a global perspective does make sense and matches the international nature of the FinTech industry.
And finally, with all your experiences that you’ve gathered, is there anything you would like to tell young Swiss startup founders?
Gathering a great team and jointly working hard towards a common goal pays off eventually. There will always be ups and downs but with persistence and teaming most challenges can and will be met. Also outside your firms you are not alone: The startup and FinTech-ecosystem is ready to help and there are plenty of opportunities out there to leave one’s mark in the FinTech ecosystem and maybe to become the next Swiss FinTech unicorn!