Switzerland has been named the second most tasty location in Europe for fintech stakeholders, surpassing the Netherlands, Estonia, and the UK. The nation is acknowledged for its conducive enterprise atmosphere and the attractiveness of the native marketplace for fintech gamers, in accordance with the 2024 European Fintech Index.
The index, launched on June 27 by Lithuanian fintech firm ConnectPay, gives an summary of the fintech panorama throughout Europe. It evaluates key markets within the area and their potential for fintech companies, authorities establishments, traders, and different stakeholders, assessing market potential by three dimensions:
“Fintech attractiveness”: This consists of metrics such because the presence of fintech-related regulation, funding per capita, workforce share, and the variety of fintech licenses. These components decide whether or not a rustic might be deemed a positive marketplace for establishing a fintech enterprise;“Enterprise attractiveness”: This spans a number of parameters reminiscent of startup friendliness, ease of doing enterprise, and taxation competitiveness to outline the general context for conducting enterprise; and“Market attractiveness”: This covers features that make a market favorable for fintech to conduct industrial operations and efficiently scale. Metrics embrace inhabitants engagement with digital and monetary providers, financial well being, and related laws.
Throughout the 32 European international locations studied, Switzerland ranks second, acknowledged for its favorable enterprise panorama (ranked third) and market potential (ranked third). The nation additionally boasts one of many area’s largest numbers of startup unicorns.
Switzerland has made some efforts to create a conducive enterprise atmosphere for fintech firms. In 2023, it launched the Swiss Monetary Innovation Desk (FIND), an unbiased unit inside the State Secretariat for Worldwide Finance (SIF), geared toward fostering monetary innovation by supporting collaboration between the private and non-private sectors.
The federal government has additionally launched regulatory modifications to supply higher authorized readability and encourage innovation. These embrace the Fintech license launched in 2019, the regulatory sandbox launched in 2017, and the pioneering “DLT Act”, a laws overlaying blockchain expertise, digital property and tokenization that got here into pressure in 2021.
Challenges in fintech attractiveness
Regardless of its excessive rankings in enterprise and market dimensions, Switzerland ranks eighth in Europe for “fintech attractiveness,” behind jurisdictions like Estonia and Luxembourg.
Earlier analysis has delved into the difficulties fintech firms face within the Swiss market. The 2024 IFZ Fintech Examine by the Lucerne College of Utilized Sciences and Arts’ Institute of Monetary Providers Zug (IFZ) highlights that Switzerland is lagging behind fintech hubs reminiscent of Singapore and Sweden. These international locations have been extra proactive in enhancing their assist for fintech firms, overshadowing Swiss efforts.
Moreover, a 2024 research by UBS, Credit score Suisse, and the Swiss ICT Investor Membership (SICTIC) signifies that Swiss startups face vital funding challenges and restricted worldwide recognition. Furthermore, with a inhabitants of simply 9 million, the native market is simply too small for startups to thrive, compelling younger Swiss tech ventures to hunt worldwide enlargement early of their growth.
Entry to well-educated employees is one other key problem confronted by Swiss startups, with 46% of the founders polled by Credit score Suisse discovering it arduous to fill vacancies with appropriate candidates. Labor market challenges are extra pronounced for startups within the progress and enlargement part, with 55% of struggling to recruit certified staff, in comparison with 39% for startups within the pre-seed and seed phases.
Sweden acknowledged as essentially the most enticing nation in Europe for fintech stakeholders
The 2024 European Fintech Index ranks Sweden as essentially the most enticing nation in Europe for fintech stakeholders. The nation, which ranks inside the high 5 throughout all three dimensions, is acknowledged for its excessive variety of info and communications expertise (ICT) and fintech professionals, and its fintech-friendly labor market construction.
Baltic state Estonia tops the rating within the enterprise (ranked 2nd) and fintech (1st) dimensions, due to its sturdy unicorn presence per million capita, excessive variety of fintech offers per million capita, and favorable regulatory frameworks.
Lastly, Denmark ranks 1st in market attractiveness, supported by its sturdy gross home product (GDP) per capital and personal consumption progress indicators. The Scandinavian nation takes the third place within the total rating.
Featured picture credit score: edited from freepik
