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.

The importance of skill-based recruitment

Skill-based recruiting has become all the more important in the modern world of work. While experience will always be valuable, assessing candidates based on skills and holistic competencies, rather than their last job title can pave the way for exceptional talent. Over the years, Switzerland has faced skill shortages in many different fields, so companies must take a skill-based approach to recruitment. Skill-based recruitment places the recruiter in the driver’s seat. It means pursuing all the relevant information to match candidates’ skills with the requirements of the job. Below, we’ve outlined the key benefits of recruiting for skills.   Transferrable skills   Skill-based hiring enables recruiters to find candidates with core expertise that can be applied in a variety of different environments. While candidates with years of direct experience may look like an ideal choice for a role, there’s a chance they might not be as adaptable in a new business. Core skills like problem-solving, interpersonal skills and technical competencies are more likely to be transferrable to other industries, increasing the chances of you make an excellent hire. Simply put, focusing on core skills and personality can be much more beneficial for businesses that are looking to grow, and maintain a clearly defined culture. However, screening candidates for skill and talent rather than previous experience means recruiters will need to pay extra attention to people’s cover letters and CVs. Thanks to recruitment technology, most applications are automatically filtered, helping the recruiter save time and find the ones that match the predefined criteria.   Add Diversity   One of the key benefits of skill-based recruitment is that it can add greater diversity to the workplace. Individuals from different backgrounds and diverse skill sets can add different talents, and experiences to the working environment, which can benefit the organisation. When you focus strictly on candidates with a set amount of experience, you risk missing out on individuals who are otherwise strong candidates. While it can be risky to invest in a candidate who’s less proven, they can bring a diversity of thought across the company with their skill set. Using a skill-based approach combined with “blind hiring” also removes any unconscious bias, enabling hiring managers to make more informed decisions, resulting in a much more diverse workforce.   Focus on potential   When you seek candidates with specialist skills, it allows you to focus more on their potential. New skills and competencies can always be taught whereas highly experienced candidates might have a well-established work style that may not be suited to certain types of companies. We’re now entering an era where professionals are constantly changing career paths, and where the younger generations are starting to dominate the workforce. What younger generations may lack in experience, many of them make up in attitude and digital skills. Taking a skills-based approach to recruitment allows you to expand your talent pool and find potentially great candidates that you may have previously missed.   However, companies must establish systems and internal capabilities that allow for skill-based hiring. This means hiring managers must adjust their mindset and use more skill-based assessments when recruiting, with more discussions about the most critical skills. In this way, businesses can be more organised and match candidates with the appropriate roles.    How can Swisslinx help your business?   Swisslinx has a highly experienced team of consultants who are dedicated to providing the best recruitment service to clients and candidates. We take the time to understand your requirements and then deliver tailored recruitment solutions. Our team recruits the best professionals into a wide range of sectors, including financial services, digital and technology, life sciences, as well as engineering. If you would like more information on how we can assist with your recruitment, contact us today.

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How to be successful in the final round interview

As a candidate, the final round interview is the last opportunity to show why you’re the best person for the role. What happens in the first interview can be dramatically different from the final round, so that’s why it’s all the more important to prepare thoroughly and expect to be asked some challenging questions. Hiring managers do not often make final round interviews for candidates they’re not serious about. Therefore, when you’re invited to the final round, the hiring manager already knows that you have the skills for the job. What they’re going to be looking for is how you present yourself under pressure and whether you’re a suitable fit culturally for the organisation. Here’s a swift guide for how to give yourself the best chance of succeeding in the final round interview and securing a job offer.    Review the company and position   Once you’ve made it to the final round, you need to make sure you completely understand the position and the company. The final round may be much longer and involve more people. This means that professionals should review the job specifications again beforehand and be prepared for in-depth questions. At this stage, hiring managers want to determine fit and whether or not the candidate is a team-player. Companies will also use a final round interview to learn how you manage deadlines and juggle workloads. Hiring in a pandemic is no easy task, so companies will likely be paying extra attention to detail and focusing on the candidates who show the most potential. This means it’s important that you thoroughly research the company and come prepared with what you like about the company. Having that extra preparation will increase your chances of being offered a role.    Share your knowledge and expertise   While many final round interviews will be based on how you fit into the company or the team, hiring managers will still want to verify your technical skills and competencies. So, it’s crucial that you effectively share your knowledge and expertise during the interview, and quantify wherever possible. This means discussing your key accomplishments and how they were achieved, as well as any notable skills relevant to the role. For example, you might have excellent time management skills, so you will need to explain how these skills have helped you perform. Whether it’s through project management software or your strategic planning, you must show the unique qualities you bring to a company. Also, always show confidence and evidence of all your skills and experience.   Ask the right questions   In the early rounds of interviews, it’s important to ask thoughtful questions, but in the final stage, you’re going to need to show you’ve thought more seriously about what it would be like to work at the company. Therefore, professionals in the final round should ask questions about what the first month on the job would be like and if there will be any training, as well as what the performance expectations will be when you join. These type of questions show hiring managers that you’re already engaged and eager to be a part of the company.   Show your commitment and passion   In the final round, hiring managers will want to ensure candidates are interested in staying for a long period. Arguably one of the best ways to show you’re a committed professional is by discussing your long-term career plans, and how it’s connected to the role you're interviewing for. Hiring managers want to find candidates who have a strong work ethic and have the potential to be high performing. This means you need to demonstrate a passion for the industry and that you’re genuinely interested in this specific field. For a company, the final round interview is all about evaluating a candidate’s characteristics and attitude, so make sure you tell stories of how you solve problems and why you enjoy your work, which will no doubt help you stand out from other candidates.   Are you looking to advance your career?   At Swisslinx, we have a motivated and friendly team of recruitment consultants who are dedicated to building great relationships with clients and candidates. We specialise in recruiting for a varied range of sectors, including financial services, digital and technology, healthcare and natural resources. Our team works to the highest standards and we’re committed to delivering an exceptional recruitment service on a daily basis. If you would like more information on how we can help your career and even prepare for your next role, contact our team today.

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