Encouraging innovation

The future of the Geneva financial centre depends more than ever on its capacity to innovate, especially in technology. The banking industry will have to reinvent itself to meet the requirements of generation Y and Z. This is where FinTech drives competitiveness. Governments can facilitate the process by providing a favourable regulatory framework.

Competitiveness

Several recent studies show that the financial centre innovated in long before the term FinTech was coined

The World Economic Forum (WEF) and IMD Business School rank Switzerland among the world’s most competitive nations.
The WEF Global Information Technology Report 2016 places Switzerland in the top ten in terms of technological readiness, thanks in part to substantial investment in digital networks.
The Swiss Finance Institute (SFI) has examined, through a representative study entitled "Digital Pulse Check 3.0", the current status of digitalization within the Swiss banking sector. The main objective of the study is to determine the level of digital maturity of Swiss banks compared with the rest of Europe. Switzerland leads 1-0 at half-time!
In its "Survey on Digitalisation and Fintech at Swiss Banks 2019", published in August 2019, the Swiss National Bank points out that the banks view the digitalisation mainly as a source of opportunities, particularly with regard to cutting costs and improving service quality.
According to the latest Ernst & Young ‘Banking Barometer’, published in January 2019, Swiss banks have fully integrated the digital revolution in their priorities and consider that digitization is the strongest driver of long-term structural change. Structural change in banking materializes in serveral waves. Digitization and structural change are affecting retail banks first. According to the survey, the Swiss banks believe that customer proximity (40% and high quality of advice (27%) are ultimately the crucial factors for ensuring customer loyalty in the future.
The "2 019 IFZ Global FinTech Rankings" places Geneva on the 3rd position and confirms that Switzerland has evolved into a leading global FinTech hub.

Regulation

Large financial centres today have vastly expanded their digital capacity. To remain competitive on an international scale, the Swiss banking industry needs a regulatory framework that supports the future evolution of technology.

In the United Kingdom, regulatory authorities have taken a proactive approach: the Financial Conduct Authority plays a key role in promoting economic development by supporting FinTech companies through its ‘innovation hub’ programme.

In Switzerland, the Federal Council recently adopted a ‘Digital Switzerland Strategy’ calling for close cooperation among all economic sectors. The FINMA, meanwhile, has decided to authorise online identification of banking clients, an important development for an international financial centre like Geneva, and one that is likely to benefit both retail banks and institutions specialising in wealth management.

To ensure the financial centre remains competitive and continues to innovate, government and political leaders must provide a determined regulatory impetus, in order to give Switzerland a legal framework that supports the development of FinTech and does not discourage innovation.