What impact will open banking have in Switzerland?

Posting date: 21 July 2020

Open banking has been a hot topic within global financial sectors for the past few years, with the UK, EU and Australia leading the charge in implementing and embracing the financial services system. In fact, more than 87% of countries worldwide have established some form of Open API in the banking industry – yet Switzerland is not considered to be a leader in this space, but a ‘riser’, thanks to the unregulated nature of the market. But what actually is open banking and what benefits and challenges might it present to the Swiss market?


What is open banking and what is it used for?

Open banking is defined by the Swiss Banking Association as “the business model based on the standardised and secure exchange of data between the bank and reliable third-party providers”. Using application programming interfaces (APIs), open banking gives these providers access to consumer banking, transaction and other financial data, allowing the networking of accounts and data to provide more insights and services in a secure way.


The benefits of open banking are plentiful and apply to consumers, providers and banks themselves. Things like switching between banks, discovering new financial products and receiving tailored advice and insights can all be made easier with open banking, while lenders can use open banking to understand more about their customers to offer bespoke solutions, such as loans or mortage products, as is the case with Mojo Mortgages. Customers can track their spending habits across all their accounts and providers, with the likes of Moneybox and Yolt offering tracking and savings solutions that provide much more detail than traditional banking apps.


Open banking will force large, established banks to improve their technology and customer service offerings, competing with startups and fintechs to ultimately usher in a financial landscape that has lower costs, better customer service and more sophisticated technology.


What is the resistance to open banking?

Despite open banking providing enhanced levels of flexibility and oversight to consumers, it has not been readily adopted in all nations, and Switzerland has been very cautious about implementing it nation-wide. The historically conservative financial centre has been reactive in its approach, waiting to see how initiatives work in other markets and assessing the perceived risks. The shift toward an open data sharing model has led some to raising security concerns, with banks potentially exposed to financial and reputational damage in the event of an unstable system. Regulatory guidelines can help to address these risks and allow supervisory authorities to monitor developments and implement safety measures to protect against fraud and data breaches.


Switzerland’s adoption of open banking

While open banking could now be described as a global phenomenon, Swiss legislators have responded more slowly and cautiously than pioneers like the UK. The Swiss Bankers Association rejected a proposal for the PSD2 to be adapted for Switzerland, which has encouraged conversation between trade groups about the best way to approach a regulated open banking solution. Because the Swiss parliament has shied away from promoting open banking through regulatory measures, and Switzerland is not legally obligated to transpose European directives – such as a PSD2 – to national law, it’s been left up to financial institutions and other groups to drive open banking forward. There’s a focus on developing a widespread API standard amongst all stakeholders, however with no regulators setting conditions or standards on behalf of the nation, Switzerland lags behind other parts of the world in adopting open banking.


We have seen organisations introduce initiatives to develop standards for banks and providers to enter open banking in the country, with the likes of OpenBankingProject.ch and SIX Connectively Platform working to facilitate open banking cooperation and information exchange within banks, fintechs and integration providers. Recently, Credit Suisse and KLARA have emerged as the first partners to be connected via SIX platform b:Link, which allows them to offer additional payment transaction applications to SMEs. This move may signal more adoption of open banking by Swiss companies in the future.


With the retail market evolving and new entrants already providing competition to banks, expectations of both financial institutions and customers will continue to increase. As we see the success of open banking overseas, we’ll likely see customers demand more from their providers and have higher expectations of the types of services on offer. To remain competitive and retain their valued customers, Swiss banks and financial institutions may well begin opening their systems to third parties in a proactive move to provide more advanced banking systems, even if regulations do not force them to do so.


Stay up to date on the open banking landscape with Swisslinx

At Swisslinx, we’re always interested in seeing how the financial services market evolves and embraces innovation, and how our clients and candidates fit in. Find out more about the financial services jobs we have available, or read our blogs for more insights on this and other markets in Switzerland and abroad. 

How Covid-19 has accelerated the adoption of big data

In the early weeks of coronavirus, all eyes were on how Switzerland’s authorities responded to Covid-19. Several months on and the effects of the virus can now be identified, including how the outbreak has impacted big data.   As the name suggests, big data refers to large collections of information which grow exponentially and are therefore too complex to be stored and processed by traditional software. The term combines both structured – credit card numbers, product names and transaction information - and unstructured data – email messages, video files and imagery – illustrating exactly why big data just keeps getting bigger. Here’s how Covid-19 has boosted the amount of information we generate and accelerated the adoption of big data.   Covid-19 has pushed digitisation in all sectors In 2018, the global big data market was valued at $23.1 billion and it’s predicted to skyrocket up to $79.5 billion by 2024 – which is a CAGR of 25.4%. Covid-19 has amplified this growth by encouraging innovation across the entire digital ecosystem, from big data and AI to cloud computing and IoT. In retail, companies have embraced technology in order to remain relevant and heard by consumers, while the traditional courts have felt the pressure to adopt modern practices - storing evidence in the cloud - to protect the justice system. Just as blockchain technology has enabled the digitisation of the commodities market, big data has facilitated the digitisation of various industries during Covid-19 and even supported growth for the ecommerce market.   More data is being generated than ever before Before the lockdown, when supermarkets, hospitals and car garages were open, people could have as little interaction with digital technologies as they liked. But when social distancing measures were brought in many people were forced to rely on technology to get food to their homes and interact with their doctors online. In every corner of the globe, more people have become reliant on the internet for the most basic of tasks and this has generated an exorbitant amount of data.   The spike in digital interactions is also a result of the increased leisure time people now have. Experts predicted that by 2020 the amount of data generated each second would amount to 1.7MB per person, meaning that each day it would hit a staggering 146,880MB. When this prediction was made, there were 1.25 bitcoins and 3,877,140 Google searches generated each minute, all of which contributed to the growing stocks of big data. Now, with more people spending time online and searching for ways to remain productive in lockdown or information about coronavirus symptoms, the data collections are burgeoning.   How big data will help in the fight against Covid-19 Since the beginning of the pandemic, big data analytics have helped technology professionals provide the healthcare industry and governments with insight into the virus and has enabled app developers to create contact tracing technology that was essential to track the spread. Switzerland was the first country to release a virus tracking app and their swift response has been a large contributor to keeping the infection rate low.   The potential of big data analytics goes beyond tracking coronavirus. The past few months have demonstrated how the sophisticated technology can prove useful right from the point of screening and diagnosing the virus in the early stages, up until developing treatments.     Let Swisslinx help you navigate the job market Our team of consultants are experts in their chosen specialism and well-practiced in providing support throughout the recruitment process and beyond. Whether you’ve got a vacancy to list or you’re searching for your next job we can help. Contact us today to find out more about our services or browse our digital and technology jobs to start your search. 

READ MORE

Why the Swiss job market is banking on blockchain

Switzerland’s strong reputation as bankers, chocolatiers and watchmakers didn’t come about by chance. Their dominance in these markets is a result of a focus on exceptional service and high value products which has earnt them the second highest GDP per capita worldwide. Emerging industries such as blockchain are benefiting from Switzerland’s prominence in the global marketplace and are gaining noticeable momentum. This reputation has enabled the nation’s Crypto Valley to establish itself as blockchain hotspot, attracting 100 new businesses in 2019 and creating over 1,000 jobs. Here are four reasons why the Swiss job market is banking on blockchain.   Blockchain is the answer to our security issues Bitcoin made its entrance in 2008 and questions began flying as to whether the digital currency could be trusted. Enter blockchain, which provided the security to users by recording chains of information about the transaction - but now fast forward to the year 2020 and a new security issue has emerged. Covid-19 has exposed a growing threat to data security, and yet again blockchain technology has stepped up to the mark and exposed a growing demand for blockchain developers and site reliability engineers among other IT professionals. This illustrates how the technology will help protect the global economy and may even be used to prevent crises in the future.   A growing digital token market In 2017, a surge in initial coin offerings (ICOs) led to the hub of token-funded projects in Zug being named Switzerland’s Crypto Valley. An ICO is the most effective way for start-ups to generate investments and for this reason they’re commonly thought of as a source of crowdfunding. While fintech start-ups and other new businesses rely on this method for raising capital, the smart contracts rely on blockchain technology to provide the digital tokens.   Despite the amount of published ICOs flattening after the peak in 2017, there remains a steady number of launches each year and Switzerland just misses out on a medal in the worldwide rankings for capital raised from ICOs, coming in fourth place with an impressive total of $2 billion. Technology professionals can expect their blockchain skills to remain in high demand as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) steal a share of the digital token market.   A government who is backing blockchain Switzerland’s National Council have held back from applying tax laws to digital tokens which is cause for celebration for the cryptocurrency market and in turn for blockchain technology. While the market remains in its infancy, the government will not apply capital gains tax legislation on any earnings and in doing so hopes to encourage more investments. Though this exemption can’t be expected to continue well into the future, it gives ample time for blockchain to put down roots in Swiss soil and establish a strong job market.   In addition, the National Council have announced a legislative package, passing several new laws that are designed to eliminate the legal obstacles that apply to blockchain and distributed ledger technology. This will attract more blockchain start-ups to Switzerland, and professionals with expertise in this field will reap the benefits as the nation asserts its dominance in the global blockchain market.   Working remotely Shortly after the turn of the decade, workplaces around the world had to solve the puzzle of continuing business operations whilst observing social distancing. Thankfully, for companies in the blockchain space, working out the logistics was far easier compared to other industries and moving their teams online has revealed some added benefits such as increased productivity. Now the challenge lies with product managers, technical business analysts and their IT colleagues to master the art of maximising productivity when working from home.   Since the outbreak of coronavirus, Blockchain has proved itself to be an essential and resilient industry, and the Swiss job market’s confidence in the technology will continue to grow as our world continues on the path to digitalisation.   Apply for a role with Swisslinx today Are you banking on blockchain? Our consultants at Swisslinx understand the importance of keeping a keen eye on technology drivers and trends such as blockchain. This deep understanding of the industry enables them to identify the top talent and place these candidates in organisations at every point of the scale – from boutique start-ups to global corporations. View our vacancies in financial services or explore our digital and technology jobs to start your application.

READ MORE