Swiss bank Vontobel is launching a digital platform to match public sector borrowers with private institutions. The move represents a counterattack on the fintech industry.

Vontobel is launching Cosmofunding, a digital platform for private placements and loans, the Swiss bank said on Wednesday. The idea is for public sector bodies such as cities and municipalities to access capital markets. The platform will also be able to securitize tailor-made financing solutions when it launches on September 3, Vontobel said.

Vontobel vs Loanboox

The bank is working together with Fedafin on the platform. The Swiss credit ratings agency is meant to give assurance on the creditworthiness of the issuer and the offering to institutional investors. Fedafin rates 2,200 Swiss municipalities and cantons as well as 320 companies.

If Vontobel says it wants to revolutionize the credit market, they will soon meet opposition from several fintech loan platforms. Cosmofunding's business model is very similar to Zurich-based start-up Loanboox, which has seen heady growth since its 2015 launch and is attempting to crack the European market.

Vontobel's intentions are equally clear: «We want to be the number one», investment banking head Roger Studer said at a media briefing.

Banks Shut Out

Vontobel's efforts represent a tiny step by traditional finance to win back ground lost to fintechs: platforms like Loanboox have effectively shut out banks as the traditional middleman in lending, and lowered costs as a result.

Unlike start-ups, Vontobel can offer an independent rating and the potential to securitize loans. The bank also has easy access to institutional investors, and Cosmofunding provides an opportunity to kickstart Vontobel's corporate client business.