2024 was an eventful year for the Swiss fintech industry, which witnessed high-profile developments and promising growth in niche areas, but also significant challenges.
Corporate bankruptcies soared to record levels, impacting the fintech sector. Meanwhile, funding for fintech startups continued its downward trajectory as investors increasingly prioritized biotech, as well as energy and cleantech.
Despite these setbacks, Switzerland’s fintech sector showed resilience and innovation. Key milestones included notable acquisitions, progressive regulatory measures covering artificial intelligence (AI) and digital assets, as well as government-backed initiatives including the rollout of instant payments and the inaugural SwissHacks event.
Corporate bankruptcies reach new record
In 2024 Switzerland witnessed a sharp rise in corporate bankruptcies, setting a new record. According to Swissinfo.ch, bankruptcies increased by 15% to 11,506 cases, driven by a notable 18% surge in insolvencies due to over-indebtedness. Organizational deficiencies also accounted for a 6.6% rise in bankruptcy publications.
The fintech sector also faced challenges. In particular, FlowBank, a Geneva-based online brokerage and trading bank, was declared bankrupt by the Swiss Financial Market Supervisory Authority (FINMA) in June.
This measure became necessary as FlowBank no longer had the minimum capital required for its business operations, and faced issues related to incomplete financial reporting. There was also fears that the bank was over-indebted.
FlowBank was a bank offering online brokerage and trading with its head office in Geneva and subsidiaries in London and the Bahamas. The bank had total assets of approximately CHF 680 million at the time of the announcement, over 22,000 client accounts and around 140 staff worldwide.
FlowBank launched in 2020, offering banking and trading services. It was the banking partner for Techteryx, the stablecoin issuer behind TrueUSD (TUSD). The company was part-owned by crypto asset management firm CoinShares and reportedly offered banking services to Binance, the world’s largest crypto exchange.
Declining fintech funding
2024 saw fintech funding drop significantly. In H1 2024, investments in fintech startups in Switzerland fell by 58.5% year-on-year (YoY), plummeting from CHF 191 million in H1 2023 to CHF 79.2 million in H2 2024, according to the new Swiss Venture Capital report. The number of financing rounds also saw a significant drop, declining from 30 in H1 2023 to just 13 in H1 2024, marking a 56.7% decrease.
This downturn reflects a broader shift in investor priorities, with growing attention directed toward sectors such as biotech, as well as energy and cleantech. In H1 2024, biotech startups generated CHF 405.3 million, the third highest amount ever. This is a significant improvement compared to H1 2023, during which biotech startups secured CHF 282.8 million through 14 deals. Energy and cleantech startups also attracted increased investments, securing CHF 160 million across 27 rounds in H1 2024, up from CHF 137 million and 19 deals in H1 2023.
Significant fintech acquisitions
2024 also recorded a number of notable acquisitions in the Swiss fintech landscape:
- NetGuardians, a specialist in AI-driven fraud prevention and anti-money laundering (AML) solutions, was acquired in September by Stockholm-based private equity firm Summa Equity. Recognized for its pioneering approach, underpinned by its proprietary 3D AI technology, NetGuardians serves over 80 banks and wealth managers worldwide, including Zürcher Kantonalbank (ZKB), Lombard Odier, Swissquote, and the United Overseas Bank (UOB).
- MidFunder, a Zurich-based fintech company providing financing to companies with recurring revenue, was acquired in March by Levenue, Europe’s largest revenue-based financing company. The acquisition aims to accelerate Levenue’s growth in Switzerland.
- Moneyland.ch, a popular comparison platform in Switzerland, was acquired in July by SMG Swiss Marketplace Group, a firm which operates network of online marketplaces. The acquisition aims to strengthen SMG Swiss Marketplace Group’s finance and insurance division and allow it to gain valuable comparison services for consumers.
Controversies and regulatory actions
In 2024, two significant developments unfolded in the Swiss fintech industry, underscoring the challenges faced by some of its leading players.
The first event involved Temenos, a global leader in banking software based in Geneva. In February, the company was accused of “accounting irregularities” by the short-seller Hindenburg Research. These allegations, including claims of earnings manipulation through contract backdating and the funding of software purchases through undisclosed investments, sparked widespread attention and affected the business, delaying deal signings and dampening revenue growth, the company said.
The Swiss provider of banking software reported second-quarter sales of US$248.4 million, missing the US$255.1 million average analyst estimate compiled by Bloomberg. It slashed its 15% target for sales growth for 2024 by two percentage points.
Temenos conducted a probe which concluded the short seller’s findings were “inaccurate and misleading” in April. It also appointed new CEO Jean-Pierre Brulard after pressure from activist shareholders.
Temenos is a global financial software company specializing in core banking solutions to financial institutions, including retail, corporate, business, and wealth management banks. It has a diverse and impressive client base, including some of the world’s largest and most well-known financial institutions such as ABN AMRO, Societe Generale, Nordea Bank and Alrajhi Bank.
The second key development involved Leonteq, a Zurich-based derivatives specialist. The company faced regulatory action from FINMA for having violated its risk management obligations related to the distribution of financial market products by foreign distributors, Swissinfo.ch reported in December. As a result, the financial regulator ordered the firm to hand over CHF 9.3 million in profits.
The investigation also revealed that Leonteq had worked “in some cases with dubious, unregulated distributors”.
Prominent fintech trade groups merge
December saw the merger of the Swiss Fintech Association (SFA) and the Swiss Finance + Technology Association (SFTA), two prominent fintech trade groups in Switzerland.
The unified entity, named the Swiss Fintech Association (SFTA), said it will focus on enhancing advocacy, expanding its networks, and supporting the growth of the Swiss fintech ecosystem. Key initiatives will include continuing to develop the Fintech Fair, regular decentralized meetups, as well as stronger collaboration with regulators and policy makers.
Government and regulatory initiatives
In 2024, the Swiss government continued its commitment to fintech development through several key initiatives.
In July, FINMA published new guidance on the issuance of stablecoins, emphasizing the financial market laws that apply to projects aiming to issue stablecoins, including AML regulations and minimum requirements for default guarantees.
In December, the regulator released additional guidance on governance and risk management when using AI, focusing on operational risks, data-related risks, IT and cyber risks, increased third-party dependencies as well as legal and reputational risks.
In August, instant payments went live in Switzerland, allowing private individuals and companies to perform account-to-account transactions with immediate execution and final settlement in seconds – 24 hours a day, 7 days a week (including public holidays). Around 60 financial institutions had the capability activated at launch, covering more than 95% of Swiss retail payment transactions. The Swiss National Bank (SNB), in collaboration with SIX Group, spearheaded the initiative.
Finally, June marked the inaugural SwissHacks event, a government-sponsored hackathon dedicated to financial innovation. Organized by the Swiss Financial Innovation Desk (FIND), an independent unit within the State Secretariat for International Finance (SIF), this event aimed to bring together talent and foster innovative solutions for Switzerland’s financial ecosystem.
A booming sustainable fintech sector
E.foresight, a Swiss banking think tank operated by telecommunications provider Swisscom, released in June its Swiss Sustainable Fintech Map, highlighting the fintech companies in Switzerland that incorporate sustainability into their core business models, operations, and products.
The map revealed that Switzerland was home to 49 companies that fall under the sustainable fintech category at the time, providing the segment a share of 12% of the overall fintech ecosystem.
The figure implies that the Swiss sustainable fintech sector rose by 53% between 2023 and 2024, growing at a much faster pace than the fintech sector as a whole (16%) during the period, data from the 2024 IFZ Fintech Study by the Lucerne University of Applied Sciences and Arts’ Institute of Financial Services Zug (IFZ) show.
Switzerland is recognized as the fourth market globally for sustainable fintech. This thriving space has risen on the back of supportive initiatives and promotion efforts by the government through initiatives such as the establishment of the Green Fintech Network, the release of the Green Fintech Action Plan, and the launch of a new system that measures the environmental impact of financial investments.
Swiss retail banks unfazed by fintech competition
Switzerland has seen a sharp increase in fintech companies, which grew from fewer than 200 players in 2016 to nearly 500 in 2023.
Despite this growth, Swiss retail banks remain optimistic about their competitive position, confident in their ability to maintain strong customer relationships and deliver high-quality advice, even in the face of new entrants.
A study by auditing and consulting firm EY, in collaboration with the University of St. Gallen, reveals that these advantages, which include capital strength, brand trust, a diverse product offering and long-established customer relationships, position incumbents well against fintech companies and neobanks.
These players are facing hurdles such as limited customer bases and challenges in scaling their operations, which have so far constrained their market penetration.
Swiss financial institutions double down on digital assets
In 2024, Swiss financial institutions ramped up blockchain and crypto initiatives. According to a study by the University of St. Gallen, in collaboration with vision& and mintminds, more than 80% of Swiss banks are either planning to develop and actively expanding their blockchain offerings, with a particular focus on cryptocurrencies (+60%)
Meanwhile, the Swiss stock exchange is exploring the creation of a venue in Europe for trading cryptocurrencies, the Financial Times reported in September. SIX Group, which is owned by 120 banks, runs a crypto derivatives company called AsiaNext out of Singapore, in a joint venture with Japan’s SBI Group. It also operates a separate digital exchange in Switzerland, where nine digital bonds have been listed since 2018 by issuers such as investment bank UBS and the city of Lugano local authority.
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