Why the Swiss and Singaporean FinTech Ecosystems Should Grow Closer

September 3, 2019

At the F10 FinTech Hackathon in Singapore, game-changers from Switzerland and all over Asia come together to drive innovation towards the future of finance and regulation. With the 48-hour event in the heart of the ASEAN economy, F10 aims to bridge the gap between the Swiss and Asian FinTech ecosystems. We have listed five reasons why Switzerland and Singapore should join forces in technical development and disrupt the financial world together.

“The world economy is undergoing a major shift in dynamics, and technology is at the forefront of this change. With both countries' excellent standing and expertise in the verticals markets such as FinTech, Artificial Intelligence (AI), MedTech, BioTech and urban solutions, companies can and should find areas to collaborate and to scale. These are the sectors where Switzerland and Singapore have common interests”, Fabrice Filliez, Swiss Ambassador to Singapore, said in an interview with “Business Times”.Read here what Switzerland and Singapore have in common and why these important financial marketplaces should collaborate to further innovation in the global finance sector.

Innovation as the motor of the economy and society: Despite being small countries, both Switzerland and Singapore are renowned for a high degree of innovation. In 2019, Switzerland has been ranked number one by the Global Innovation Index for the ninth year in a row while Singapore is the most innovative country in Asia. Switzerland scored particularly high in the category ‘knowledge and technology outputs’ and the alpine country has the highest ratio of European patent applications to population. Singapore ranked top for government stability and effectiveness as well as for the ratio of foreign tertiary students to the total number of tertiary students."Asia offers some key advantages to Western-based companies looking for innovation, including lower-cost but highly skilled resources (arguably on a level with those in the West)", the PwC report “Financial Services Technology 2020 and Beyond” found. One goal of the F10 FinTech Hackathon Singapore is to integrate innovators from Asia into the Swiss FinTech network.

Strong finance industries: Of outstanding relevance for the Swiss as well as the Singaporean economy is the finance industry. Switzerland is internationally famous for being a stable and robust financial centre. “The financial sector, and particularly the banking sector, is one of the key elements of Switzerland’s economy. Around one in ten value-added francs in Switzerland is generated in the financial sector. Banks contribute to Switzerland’s international top competitiveness rank by catalysing economic development, offering a large number of skilled jobs, paying above-average salaries and contributing a considerable share of public-sector funding in taxes”, the European Banking Federation writes. In Asia, Singapore is one of the most important financial centres and the International Monetary Fund describes the city-state as “large financial centre with a strong regulatory framework and significant external exposures”. Singapore boasts a highly developed and sophisticated financial sector, with many foreign branches intermediating funds throughout the region. Regulations are closely aligned to international standards.“Singapore and Switzerland are two important global financial hubs, flirting with top positions in various international rankings. No doubt, both of them can efficiently complement each other and get stronger together, by stimulating excellence and efficiency on a regional and global scale”, Ambassador Filliez said in the interview with “Business Times”. Financial stability is a key prerequisite for the functioning of a national economy and an investment-friendly environment. Switzerland is one of the world’s most stable economies with the Swiss franc being one of the strongest currencies and Singapore’s financial system is also highly stable.

The role of FinTech: FinTech offers the global finance industry new possibilities to adapt to changing customer needs, reduce costs and make products available to a larger share of the world’s population. Financial technology is useful in a broad range of business segments such as payments, lending, investment management, money transfer, fund-raising and robot advisory. In traditional finance companies, the transformation towards more innovation may happen through partnerships with Startups and through acquisitions. “We are convinced that agile Startups with disruptive ideas and the big players need to join forces to tear down innovation hurdles”, says Thomas Landis, Head of F10 FinTech Incubator & Accelerator. In Switzerland, investors are showing increasing interest in Startups working in technology: Swiss ICT and FinTech Startups collected 685 million CHF (960 million SGD) of investment in 2018, a 120 percent increase from the previous year. This was the first time that emerging tech companies received more investments than their counterparts in the Life Sciences.FinTech is also booming in Singapore: According to the digital media platform "Southeast Asia Globe", Singapore is one of the top global hubs for financial technology, with the fastest industry growth in Asia. “Singapore and Southeast Asia are benefiting from the FinTech revolution due to the coming together of many forces. One is that much of Southeast Asia has no access to banking services”, the article states. “But Asia also makes up almost half of the world’s internet users. Add the fact that Southeast Asia has a booming consumer class, and the outlook is perfect for high-tech financial services to fill any gaps left by the bigger players.”The PwC FinTech report mentioned above states that innovations typically begin as low-cost products and services that target the most price-sensitive customers. “Asia, with its wealth constraints, vast population and favourable regulatory environment, represents an ideal fertile ground for disruptive innovation.” F10 is looking to combine FinTech developments made in Switzerland and Singapore to reach even greater demographic groups with new products or services that satisfy the needs of the next generations of banking customers and help financial institutions stay competitive in the long run.F10 as THE HOME OF FINTECH brings innovative FinTech, RegTech and InsurTech Startups together with the big players in finance, banking, insurance, consulting and digitalization. At the F10 FinTech Hackathon in Singapore, participants have the opportunity to get access to the F10 network.

Presence of the big players in the Swiss finance industry: Singapore is Switzerland's most important trading partner in Southeast Asia and the Federal Department of Foreign Affairs states that “Singapore and Switzerland enjoy excellent relations.” The Swiss Ambassador to Singapore Fabrice Filliez called Southeast Asia “an exciting region with a vibrant middle-class appeal” in the interview with “Business Times”. He further explained that purchasing power in Singapore has been growing and with it, the desire for more specialised consumer products and services. “This environment welcomes Swiss companies to leverage on Singapore's strength as a leading trading hub and to explore the use of e-commerce as a tool to reach out to potential customers. At the same time, Singapore companies should count on Switzerland's pro-business policies, highly skilled workforce and excellent connectivity as a smooth gateway to Europe's markets”, Filliez continued.Over 400 Swiss companies, particularly software companies and banks specialising in wealth management or private banking, have a regional office in Singapore thanks to the favourable conditions they are offered. The F10 corporate members SIX (the Swiss Stock Exchange), Julius Baer and PwC have regional offices in the city-state and are Platinum Sponsors of the second F10 FinTech Hackathon in Singapore. The Swiss FinTech company NetGuardians inaugurated its new Asia Pacific Headquarters in Singapore in February 2018 to bring smart fraud preventing AI solutions to more financial institutions across the region and the NetGuardians COO Raffael Maio will be one of the mentors at the F10 FinTech Hackathon in Singapore. These strong partners play an important part in bridging the gap between the Southeast Asian and Swiss FinTech ecosystems.

Startup-friendly environments: The closeness to established institutions in finance, banking and insurance as well as the availability of well-educated and experienced employees combined with the high quality of life make Zurich the most attractive city in the region to run a FinTech, RegTech or InsurTech Startup while Singapore has been named as the ideal place to found a Startup in Southeast Asia due to its location in the heart of the ASEAN economy, strong research and development funding, the diversity of tech conglomerates and growing talent.Switzerland’s progressive regulatory environment is highly beneficial for FinTech Startups and Singapore has also launched initiatives to bring finance technology innovations to the market more rapidly. There are currently 334 FinTech Startups in Switzerland and Singapore counted 490 by the end of 2018.

The best performing team at the F10 FinTech Hackathon in Singapore has the chance to win a Golden Ticket for the Top 25 of our Incubation Program starting in 2020. This Startup Accelerator Program is tailored for international teams with first prototypes – that have for example been developed at the Hackathon – in FinTech, RegTech or InsurTech.

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