Digitalisation of the financial sector

Digitalisation is an important factor for the competitiveness of the Swiss financial centre. It facilitates new, innovative business models in the financial sector. These developments are driven among other things by more powerful mobile end-user devices, improved availability and analysability of big data and blockchain technology.

Digitalisation requires innovation-friendly framework conditions. Financial market regulation should not create unjustified barriers to market entry for the development of new technologies.

Switzerland has already done a lot to remove unjustified barriers to market entry and thus promote the fintech and blockchain ecosystem in Switzerland. However, this is, and will remain, an ongoing task in view of the rapid pace of technological development.

Fintech

In July 2017, the Federal Council created an extended authorisation-exempt area (regulatory sandbox) in banking law and extended the timeframe for settlement accounts to 60 days. FINMA also examined the regulations in its area and redesigned them to be technology-neutral (e.g. video and online identification).

On 1 January 2019, a licence category tailored to fintech entered into force. Companies that operate outside the core business of banks have since been able to accept deposits from the general public of up to a maximum of CHF 100 million on a professional basis subject to simplified requirements. 

The Federal Council sees sustainable finance as a great opportunity for the Swiss financial centre. The combination of sustainable financial services and digital technology (green fintech) is particularly promising. For this reason, the State Secretariat for International Finance (SIF), together with sector representatives, launched the Green Fintech Network on 3 November 2020.

Green Fintech Network

Regulatory simplifications (sandbox) have also been drawn up for the insurance sector (insurtech). For example, in its dispatch of 21 October 2020 on the Insurance Oversight Act (IOA), the Federal Council proposed that small insurance companies with innovative business models could be either wholly or partly exempted from supervision while maintaining the protection of insured persons.

Blockchain / DLT

On 25 September 2020, Parliament unanimously approved the bill to adapt federal law to developments in distributed ledger technology (DLT). This will further improve the framework conditions to ensure that Switzerland can become a leading, innovative and sustainable location for blockchain and DLT companies.

The Federal Department of Finance initiated the consultation on the blanket ordinance in the area of blockchain in October 2020. The legislative amendments adopted by Parliament should thus be incorporated into law at Federal Council ordinance level. The consultation will run until the beginning of February 2021.

It is expected that the Federal Council will bring the amendments to the acts and ordinances into force on 1 August 2021.

Next steps

SIF regularly checks whether there is a need for action in other areas too. In the digital finance and green fintech sectors, the FDF/SIF will examine the framework conditions in detail in the course of 2021 and, if necessary, propose measures to the Federal Council.

Digitalisation presents major challenges also in terms of taxation, where SIF is actively involved at national and international level.

Further information

Last modification 13.11.2020

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