A new wave of financial institutions are transforming the field
Previously notorious for offshore bank accounts, secret holdings and masked account holders, the Swiss financial services and banking sector has completely evolved, with transparency at the forefront. Switzerland now adheres to strict regulations, requiring institutions to disclose all assets held by American account holders. In addition to the transformation of traditional financial services, the entrance of blockchain technology, fintech and cryptocurrencies are revolutionizing the Swiss field. For instance, a pioneer Swiss bank, SEBA, has created a new wave of bridging the gap between the old and new, and merged the worlds of traditional banking with crypto banking.
Regardless of the transformation, Switzerland’s financial sector has been dropping in significance of GDP and employment figures for the past ten years. Despite this downward trend, the sector’s role with regards to tax revenue paid by companies and employees has increased in importance. The State Secretariat for International Financial Matters mentioned in their Key Figures 2019 report that, “Over the last ten years, Switzerland’s GDP has risen, whereas the absolute contribution of the financial center to added value has fallen. Over the last decade, employment grew only outside the core area of the financial center. The decline in the traditional financial services sector is clearly visible.”
However, the financial and banking sectors remain key elements of the Swiss economy. Switzerland has sustained its position as a world leader in wealth and asset management, and the sector plays a vital role in contributing to Switzerland’s international top competitiveness ranking, serving as a catalyst for economic development. Sergio Ermotti, Ex-CEO of UBS Group, the largest Swiss banking institution in the world, stated, “As a small country, Switzerland is proud to compete in terms of competitiveness and innovation on a global scale. Nonetheless, we must recognize the fact that Switzerland has been slipping on global rankings. Switzerland needs to reinforce its leadership position, and continuously innovate to ensure complacency does not erode its competitiveness. The Swiss financial center has always been an important supporter of our economic growth model, and has been able to transform itself embracing both technological developments and a new framework.”
Ermotti continued to highlight, “We have demonstrated over the past ten years that Switzerland goes well beyond the Hollywood stereotype as a financial center. Despite all the challenges within the industry, we proved that the reason we are global leaders in wealth management is that we have expertise in managing wealth that goes beyond the pure asset allocation or being custodians of assets. We excel in wealth planning and helping entrepreneurs diversify their businesses. We need to replicate the ‘Swissness’ abroad, while maintaining a center of excellence at home. In order to obtain this, our strategy has embraced technology as a driver for growth, and this is the only way Switzerland can continue to be at the forefront of innovation.”
Digital innovation within the Swiss financial services and banking sector has grown exponentially in recent years, developing new models, enhancing efficiency, and in some categories, repositioning traditional banking. The Canton of Zug, nicknamed “Crypto Valley,” is a hotbed for cryptocurrencies and blockchain technologies. Zug has ambitions to become the global capital of cryptocurrencies and fintech, and establish itself as the world’s leading blockchain ecosystem. The Crypto Valley Association, in particular, works to foster growth, collaboration and integrity across the global blockchain economy. The Swiss fintech sector has over 330 companies, and a significant proportion of them are working within the field of Distributed Ledger Technology.
One the most predominant disruptors is SEBA, recognized as the new bank for the new economy. SEBA has hit a frontier, and is closing the gap between the digital asset world and traditional banking. The entity is setting new standards for transparency, performance and safety. As a fully licensed and regulated Swiss bank, it provides secure and user-friendly methods for managing traditional assets and digital assets. It allows clients to secure, trade and manage cryptocurrencies, digital assets and conventional securities under the same roof. It already has Swiss domiciled clients, and is looking to expand internationally. Their services include custody storage, trading and liquidity management, asset and wealth management, transaction banking, and tokenization. The company is redefining finance, and ensuring Switzerland maintains its footing as an innovative powerhouse.
Guido Buehler, CEO of SEBA, stated, “We are beginning global expansion and issuing digital shares and security token offerings in the first half of 2020. We are the first bank with such a comprehensive service range combining traditional, digital and crypto assets worldwide. We obtained our banking and securities license in August, 2019, and began operations in October, 2019. We are launching new products, such as SEBAX, a new generation index, representing a majority of crypto markets in terms of capital size and creating a new standard of quality in terms of security. It is a smart and reliable gateway into the crypto market for private as well as institutional clients. We’ve also launched the SEBA card, where clients can spend crypto holdings in the real economy, and our SEBAwallet app acts as a digital wallet where clients can manage all of their banking services on their smartphones.”
Buehler mentioned the benefits to being based in Switzerland, and added, “We are in the Crypto Valley in Zug, which adds value to us as an emerging entity. The area is a significant economic power, and the companies based here are creating the next generation of value in the financial services and banking sector in Switzerland, and across the globe. One of the greatest challenges today is creating a digital asset exchange, and the growing cluster based in Switzerland will perhaps be able to solve that need.”
With ambitious growth plans, Buehler was keen to mention, “Within the next five years, we would like to be a global leader in integrated digital banking. With blockchain, this truly is a revolutionary moment for the banking industry. By 2025, the digitalization and tokenization of assets could grow to become a $20 trillion market. We aim to give more people access to financial instruments across the globe, and improve their daily lives. This drop will grow into a ripple, creating a wave, and overall transforming the banking sector as we know it. SEBA is acting as an amplifier of wealth and knowledge. We are funneling macroeconomic and social trends into products, with the end goal to make the world a better place.”
The dynamic evolution of the Swiss financial services and banking sector is clear with the transformation away from the stereotypical tax haven, and emerging as a hub for innovative solutions, management of digital assets, and the utilization of blockchain technology.
