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 does the future of recruitment look like?

The world of recruitment is constantly evolving and digitisation has completely transformed a wide range of sectors. With the emergence of new skills, tools and software, organisations in Switzerland will need to implement expert recruitment strategies to secure the best talent. Switzerland has enjoyed a strong economy in recent years and statistics have shown that the unemployment rate amounted to around 3.5% in 2020. However, the way businesses recruit and retain talent will continue to shape the workforce – and while it’s difficult to predict outright what the future holds for recruitment, businesses will need to adapt to the demands of a new age of technology. And since the recruitment market is becoming increasingly competitive, recruiters are going to need plan in advance to keep up with the most in-demand talent. So, here’s an overview of how recruiting will grow and change in the future.   Focus on machine learning   Machine learning and automation will likely have a huge impact on onboarding and recruitment. AI is rapidly changing every industry and its effect on recruitment is already being felt in a multitude of ways. For example, HR automation tools have accelerated in recent years. These tools can collect, gather and analyse data, which means recruiters can easily build candidate profiles and establish a clearer picture of potential hires much more quickly. In the future, there’s no question that automation tools will be used even more frequently. One of the biggest challenges for recruiters is finding the right professionals amid the noise. Therefore, it’s likely that companies will use more machine learning and automated software to help secure the best candidates, increasing efficiency and productivity as a result.   Personalised recruitment   Today, most candidates are much informed about the type of company they want to work for. In this context, recruiters need to build an engaging and efficient hiring process, because the new generation of candidates takes a much more personalised and strategic approach to their career. Therefore, in the future, businesses won’t be able to rely on job postings or sending generic templated messages to candidates on LinkedIn. With candidates today being much concerned with an employer’s brand, the future of recruitment will be much personalised. This means that during the recruitment process, businesses will need to give candidates regular feedback and updates. In this candidate-driven market, transparency and a personalised hiring process will be of strong value in the future.   New talent pools   Recruiters of the future should begin to explore new talent pools, which include candidates with varied roles and professionals from the gig economy. In the modern world of work, employees change jobs more regularly, opting for a varied career path and different workplace cultures. The benefits of hiring these types of candidates are that they’re often exceptionally well-rounded and highly adaptable. With the rise of remote working as a result of the pandemic, hiring contractors for short projects has become much more commonplace. There will be more opportunities for businesses to hire freelance workers as full-time employees, tapping into unique skills. Recruiters of the future will likely have access to an array of talent pools with candidates from a diverse range of backgrounds.   Get in touch with our team at Swisslinx   The future of recruitment looks bright, but is your business ready to adapt to the changes? At Swisslinx, we have a dedicated and friendly team of recruitment specialists. Our team has an outstanding track record of building quality relationships with clients and candidates. We constantly keep up-to-date with the latest trends in our specialist markets, including digital and technology, financial services and life sciences. If you would like to learn more about how we can help prepare your recruitment strategy for the future, please contact us today for more information.

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How a recruitment consultancy can add value in a new world

How a recruitment consultancy can add value in a new world The COVID-19 pandemic has completely changed how companies attract, recruit and retain new employees. Businesses around the globe have swiftly embraced remote working. While there are huge benefits of in-person meetings, it’s difficult to ignore that many businesses have thrived working remote. For recruitment consultancies in Switzerland, they’ve had to adapt to a new way of hiring. The recruitment industry has entered a new era defined by flexibility and the increasing use of technology. In a post-COVID world, recruitment consultants will be high in demand for their expertise, but the landscape has changed, paving the way for a range of challenges. So, how can recruiters continue to add value to clients and candidates? Dedicated, relevant expertise One of the major benefits of using a recruitment consultancy is that they provide staffing solutions for businesses across a range of different sectors, and they remain up-to-date with market trends, which includes recruiting during this challenging time. For example, at Swisslinx, we’re able to give our clients an overview of the market, helping them to plan their recruiting and ensure they only hire the best candidates. Right now, it’s all the more important that job specifications are in line with the market. Recruiters can provide consultancy around job specs, offer sector expertise and engage passive talent using platforms like LinkedIn. With businesses receiving a strong push into the world of virtual working, recruiters have been forced to provide their expertise virtually. This means recruitment consultancies, like Swisslinx, have been able to connect with people more efficiently and build strong and lasting relationships. Streamlined process There’s no doubt that COVID-19 has accelerated the rise of technology. With in-person contact limited, businesses will need to become more agile and innovate fast, to thrive in this competitive environment. However, the recruitment process can still be a long and daunting task for many businesses, despite the new tools available. One of the most desirable attributes of a recruitment consultancy is they can streamline the whole process, from CVs and interviews to talent community building. While the lack of in-person meetings with clients and candidates can be a challenge, video interviews can take place anywhere. In the future, there’s likely to be advanced recruitment tools to facilitate virtual meetings, so that all the information can be stored and analysed in one place. Hiring in a new world The current uncertainty around the employment landscape means that businesses will need to adopt a strategic mindset to attract the right type of candidates. One of the ways recruitment consultancies can add value in this area is by helping companies make their hiring much more targeted. Recruiting in a particular niche area has become essential in recent years, but with more candidates on the market, it’s much harder to find suitable candidates. At Swisslinx, we focus on recruitment markets such as financial services, technology, science and engineering across many sectors, which enables us to provide tailored solutions to our clients. There’s no doubt the future of recruitment will be more personalised and holistic and tailored to the specific needs of clients. Let Swisslinx help your business The pandemic has had a huge impact on the recruitment sector. At Swisslinx, we’ve always had a strong value proposition and an excellent track record of building excellent relationships with clients and candidates. As we progress through the year, our consultants will remain on hand to provide companies in Switzerland with the best recruitment expertise. Our team have years of experience in recruiting the most in-demand companies and we always take the time to understand the needs of every business. Contact us today if you need help finding the top candidates and take a further look at our insights page for more engaging articles.

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