What does the growth of fintech mean for Switzerland's banking market?

Posting date: 29 July 2020

According to the IFZ Fintech Study 2020, Swiss fintechs are “beginning to outpace the [traditional] financial companies” and are growing at an annual rate of 7%. As the fintech companies make a name for themselves – particularly in investment management and banking infrastructure – this has raised the question of whether they pose a threat to the long-standing banking institutes.

 

While it may be true that traditional business models need to be revamped to fit in with the digital world there are many complex financial services that banks offer which fintech companies don’t. Here lies the solution to maximising the growth of fintech while protecting Switzerland’s banks - both markets can prosper when they focus on their unique services.

HOW LONG CAN A TRADITIONAL MODEL WORK IN THE DIGITAL WORLD?

Switzerland’s banking market attracts a huge amount of international investment, and in 2018 they were said to have $6.5 trillion in assets, which amounts to 25% of all global cross-border finances.

 

But with fintech companies flooding the market there’s been a wakeup call for traditional banks to apply technology-driven models. This has been answered by Swissquote Bank who have adopted a blockchain infrastructure and integrated robo-advisory. As more banks begin to adapt their functions it will leave those relying on their traditional business model and reputation struggling to keep pace with the digital world.

BANKING INFRASTRUCTURE

There are many services that the fintech market seamlessly offers - trading in cryptocurrencies, crowd funding and banking infrastructure – that established banks do not compete on. Narrowing in on banking infrastructure, it was found that in 2019 74% of Swiss fintech employees were working in this fintech niche. Banking infrastructure will continue to dominate the Swiss fintech market as financial services move over to the digital sphere – a change accelerate by Covid-19 – and institutions realise their responsibility to seek out systems that protect sensitive data and shield from potential attacks.

THE HOME OF THE CRYPTO VALLEY

Just as the US has the Silicon Valley in San Francisco, Switzerland has its own hub of fintech activity between Zug and Zurich. Known as the Crypto Valley, this region houses over 800 companies and 4,000 employees - with skills in cryptocurrency and blockchain - who handle the mining, storing, trading and investing of currencies such as Bitcoin. Bitcoin hit the market in 2009 and brought with it fear that digital assets would replace the traditional banking system but as it became clear that the volatile currencies would never be used to pay salaries or to take out mortgages, banks recognised they weren’t a direct threat to their services.

THE START-UP SCENE

With its world-renowned banking market, it’s no surprise that fintech has been crowned an up and coming star in Switzerland. Despite having a small population, the nation ranks fifth in the world based on their fintech business infrastructure and ecosystem quality, competing with the powerhouses that are the US and the UK. More fintech start-ups are springing up each day in Switzerland and though banks have traditionally been wary of investing in new businesses with little capital and unproven business models, they are beginning to get behind the smaller companies as they recognise their disruptive business models are the future.

WORKING TOGETHER AND SIDE BY SIDE

While Swiss fintech companies operate in the same realm as the banking market, they provide a distinctly different service and therefore there is an opportunity for the two to work together and benefit from one another. The two markets can collaborate on banking infrastructure and by doing so protect maximise data security and gain more of their trust. Meanwhile, they must continue providing services that the other market doesn’t offer, meaning that banks should direct their resources towards providing complex financial services and fintech companies focus on supplying currencies that are safe from hyperinflation.

ARE YOU LOOKING FOR A NEW JOB OPPORTUNITY IN FINANCIAL SERVICES?

At Swisslinx, we understand the finance industry is subject to an ever-evolving regulatory landscape and exposed to continuous innovations, so navigating the financial services job market can be challenging. Our team of specialist consultants are constantly updating their knowledge and are sure to keep a keen eye on changes in the market. Browse our

financial services jobs to find your next job in fintech, investment banking, wealth management and asset management or insurance.

What you need to know about starting a job during a pandemic

Even in normal circumstances, starting a new job can be a daunting experience. It’s a learning curve that requires patience, adaptability, and social awareness. However, beginning a new role during a pandemic is even more challenging, as you’ll be navigating a huge change while working remotely. Professionals across all industries need to be prepared for the unexpected, as well as the onboarding process and meeting colleagues virtually.   The pandemic has proven to be a stressful time for many businesses, so it’s important anyone starting a new role can manage their own time and work efficiently. Despite the pandemic, many companies across Switzerland and further afield are still hiring. Looking ahead, the Swiss labour market is on the road to recovery after a sharp decline when COVID-19 initially broke out – which is good news if you’re looking to progress your career and land your next role. Here’s how to ensure you make an excellent start to your new role during a difficult time.   Communication is key Communication is the backbone of any business. It’s essential for achieving productivity and maintaining good relationships. However, starting a job in a pandemic means that consistent and quality communication is all the more important. Since you’ll most likely be learning your new role virtually, you must understand the preferred method of communication. Whether your company uses Microsoft Teams, Slack, or Zoom, you’ll need to ensure open lines of communication at all times while you learn the basics of your new role. COVID-19 has forced many businesses to change the way they work, with employees now expected to be more autonomous and flexible. When you’re virtual, you’ll need to make a conscious effort to connect with your co-workers and build relationships across the business. The pandemic has pushed us to embrace remote work and communication is fundamental for success.   Embrace the culture Businesses of all sizes have been forced to adapt their operations during the pandemic, and this includes workplace culture. Now more than ever, employers will want new hires to quickly learn the culture and align themselves with the company’s mission. In the COVID era of remote working, navigating company culture can be difficult due to the lack of in-person conversations. However, it’s important to recognise that culture isn’t bound to a location. Culture is all about how you connect with your co-workers. That’s why during the onboarding process, you will need to listen actively and engage thoroughly during remote calls. Since you likely won’t be in the office often, it can be harder to present yourself as a team player. But with the right transferrable skills and emotional intelligence, you’ll be able to enter a new role and build great relationships from day one.   Organisation must be a priority  Even in regular circumstances, time management is critical for productivity. But with the pandemic disrupting schedules, the ability to keep organised and track your progress couldn’t be more important. This means that when starting a new role you need to first understand what’s expected of you and make a plan that includes key dates and deadlines, with digital tools to help you stay on task. Because everything has changed so much in the COVID world, you will have to be more proactive and willing to share ideas with more experienced members of your team. As the situation evolves, you’ll need to organise your time accordingly and work in a way that gives you the flexibility to prepare for challenging situations. Starting a new job is never easy – but staying organised can make the transition that much easier.   Get in touch with our team of recruitment specialists There’s no question that starting a job in a pandemic is a real challenge for anyone. With the right leadership, co-workers, and tools at your disposal, you can thrive in an unprecedented time. The team here at Swisslinx is dedicated to providing quality career advice to help with your job search. We keep up with the latest trends in recruitment markets, from financial to digital and technology. Contact us to speak with a team member or start your job search now.

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Why recruitment can never be fully automated

Research shows that approximately 1.2 million jobs in Switzerland could be replaced by computer systems, algorithms and robots. However, the roles typically identified as being ‘at risk’ include bar staff, security guards and drivers – not recruitment professionals. On top of that, there are predictions that robotics and automation can exist alongside human professionals, enhancing their work rather than replacing them entirely.   Though AI has permeated every industry and there’s much reservation surrounding the technology, there are many benefits of automation - particularly for recruitment teams. That being said, recruitment remains a fundamentally relationship-led process that machines will never be able to replicate. Here’s why recruitment can never be fully automated and how AI can instead enable companies to redefine their talent acquisition strategies.   Benefits of new technologies While the human touch of recruitment can never be replicated, there are many ways that automation can help. One instance is AI-powered HR technology tools, which can reduce time to hire and improve the quality of hire simultaneously. AI tools and systems help recruitment professionals to sort through large volumes of applications and identify high-quality candidates – two major challenges that many consultants have faced in the wake of coronavirus. Prior to the outbreak of the virus, many companies were already using such technologies and the pandemic has triggered a widespread adoption of the technology, increasing investment in video interviewing software and virtual assistants.   In McKinsey’s The future of work: Switzerland’s digital opportunity report, results revealed that machine learning could increase the potential for automation of retail recruitment to 60% and to an even higher 66% for finance and insurance. So, how will it do this?   How automation and machine learning can help with the recruitment process People Analytics Recruitment has always been data-rich, but candidate information has traditionally been used to distinguish applicants from one another. The introduction of people analytics has enhanced this, repurposing data to predict what a successful candidate look likes. People analytics – similar to data analytics - tracks high-quality candidates and uses this information to create a personality matrix that predicts future successful hires. But while research from Deloitte found that 71% of businesses agree people analytics is high-priority, how much trust can you really place in a data algorithm?   Writing inclusive job descriptions Various AI tools can help with creating job descriptions using inclusive language such as gender-neutral keywords. As research shows that diversity drives financial progress, there’s more than one incentive for companies to strive for a diverse workforce. This application of AI technology demonstrates how automation will continue to benefit the hiring process and wider business goals by lowering the chance of using biased language.   Recruitment during Covid-19 AI-powered systems have proved their worth during the pandemic, preventing recruitment from coming to an altogether standstill and earning a permanent spot in the recruiter’s tech stack. As a result, the pandemic has accelerated the automation of recruitment, but it’s also exposed the crucial role of the recruiter.   The human element The human element of recruitment is about building relationships. Automation tools take admin tasks off the hands of the recruiter - particularly during the earlier stages of the recruitment process. Hiring teams can then reallocate this time to engage with the candidates who are further along in the process and perhaps more qualified for the role. Therefore, experienced consultants are essential when identifying high-quality candidates and during the executive search process – offering a human touch that automation cannot imitate.   Relationship-driven recruitment creates a superior candidate experience which is a crucial talent attraction strategy in a climate with a ‘war for talent’. Specialist recruiters are trusted to create, develop, enhance and maintain relevant talent pipelines so that companies have access to the best candidates from the talent pool. Whether the talent attraction goal is to ensure cultural fit, tackle D&I targets or source fresh talent from new markets, the human element remains the key piece to the puzzle.   AI and machine learning are enhancing the role of the recruiter Though 24% of Swiss employees fear that robots will replace them in their job, this view fails to consider how AI and machine learning can enhance their job role. Hiring professionals can harness technology to see better results in both their time-to-hire and in identifying high-quality candidates. Before the start of the decade, the job market had confidently established itself as candidate-driven, but now most recruiters and employers are faced with the challenge of sorting through high volumes of applications. This is where technology can help to streamline recruitment, whilst allowing consultants to focus on the core relationship-building and communication elements of the process.     Working in harmony with automation A recent report by Deloitte projected that 270,000 new jobs will be introduced in Switzerland by 2025 - the majority created by automation. The key takeaway is that AI technology doesn’t replace skilled professionals - rather, skilled hiring teams are needed to interpret the data that AI generates and add the personal touch. Though it’s still unclear to what extent recruitment will become automated, the role of the recruiter will remain an important one and will never be fully replaced by robots.   Stay ahead of the curve with Swisslinx At Swisslinx, our international team of consultants make sure to keep stay ahead of the curve, despite operating in an ever-changing recruitment landscape. Our deep understanding of our core recruitment markets and considerate approach to communication means we provide a service that is unrivalled by any technology. Contact us to find out how we can tailor our approach to suit your businesses needs.

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