by Christina Kehl
Let’s be frank, most of us have not considered it possible – but yet, Brexit has happened. And now, not only the EU and the UK are in shock and anticipating negative effects on their economies, Switzerland as well seems to be grappled by doubts.
Economists predict that the Swiss Franc will come under pressure while investments and exports are expected to decrease. ETH Zurich’s Swiss Institute for Business Cycle Research (KOF) has forecasted an economic growth of 1% for 2016 and 2% for 2017 – not taking Brexit into account.
Switzerland could leverage Brexit to its advantage – and Fintech is key
BAK chief economist M. Eichler states that Switzerland could benefit from a loss of influence of London’s finance hub. And I’d like to add that fintech is key to this.
Although Switzerland is already quite strong in fintech (counting 185 Swiss fintech startups in June 2016), we were always somehow lagging behind London. Liberal regulation, easy access to international talent and the EU linkage were for sure strong advantages for the UK financial center. With the latest referendum, the tide has turned. Now, Britain enters a period of uncertainty. International agreements might soon be voided. Switzerland on the other hand has it sorted out, we are a renowed financial hub, part of Schengen and a top partner for EU member states.
I myself witnessed the Brexit in London last week. Everyone went to bed on Thursday with the anticipation of a close result but noone really questioned the UK remaining in the EU. We woke up to a different world (for the UK) and a city in shock. There was anger, there were doubts and anxities over what just has happened. Britain has to find its place in Europe now. And noone really knows how London as a fintech hub will develop. Uncertainty is a killer for startups and corporates alike.
Switzerland is only lacking one thing: Courage!
I think, we have spent enough days in disbelief after the Brexit, it’s now time to figure out how Switzerland can help to stabilise Fintech in Europe.
Yes, we might be facing uncertain times, and yes, we cannot assess the full consequences, yet. But every crisis is also presenting a chance. And for Swiss fintech this one comes on a silver plate. Switzerland has an amazing financial reputation and tradition with regards to Wealth Management, Security, Insurance and (Crypto) Currencies.
If we play this right, we can turn these challenging times for Europe into a new beginning for Switzerland as a leading financial and fintech hub. What we now need are tremendous and fast investments in our fintech environment, innovation and education. We need a bold and broad commitment for fintech as a vital line of the Swiss financial center – by the government and the industry. We need rapid improvements when it comes to regulation – putting Switzerland on the same regulatory level for example as Singapore. And last but not least we need to implement substantial changes to shape a better startup-friendly environment (e.g. Startupsteuer of the Kanton of Zurich).
These demands might sound ambitious and they are – but there is no alternative if we want to transform Zurich and Switzerland from a leading financial hub into a leading fintech hub. We have the talent, the ideas and the financial knowledge – still valuable concepts for a thriving fintech ecosystem in Switzerland currently remain in the drawer because of the lack of financial ressources enabling us to compete on a global level.
As I witnessed myself in London last week, millions of pounds were pumped into the promotion of London as a fintech hub with fancy offices at One Canada Square in the heart of Canary Wharf. This is the new game! It is not only about hard-working founders, startups, innovators and ideas. It is about fintech marketing campaigns, political committment, international press work, shiny fun startup offices, cookies and hipsters on Instagram and Twitter talking about your fintech hub. In the end, it is about the full package. And we now have the chance and the duty to deliver an amazing Swiss Fintech Package to the world including political stability, infrastructure, competitive regulation and tax regimes, well-educated young talent, open-minded corporates and a thriving fintech eco-system.
What we need to make this happen: Courage!
We need more courageous fintech founders, more female founders, more incumbents willing to partner up with startups, more CIOs, more CDOs, more fintech investors, more cooperations, more political fintech committment, more fintech understanding in the Swiss government and administration, more of a startup and fintech voice in Berne, more money to compete on a global fintech level and the drive making this work for Switzerland. We need more courage and a strong belief that we can make it!
The cards are dealt, and let’s face it, this is a push or fold situation, and I am willing to go all-in for Switzerland. Let’s do this! #fintech #theSwissway
Christina Kehl, MD & President SFS