The Swiss fintech setting looks a little like a giant puzzle. finews.com reports on how the central bank is joining tech, entrepreneurs, banks, the government and regulator in piecing it together.

The panel was unusual in its setup: Andréa Maechler, member of the directorate of the Swiss National Bank, or SNB, side-by-side with representatives of a Swiss and a U.K.-based fintech, between the CEO of heavily digital Hypothekarbank «Hypi» Lenzburg, Marianne Wildi, and Marco Menotti, head of banking services at stock exchange operator SIX.

Maechler underscored how the digital revolution is affecting the entire financial whole system: «The changes will bring big challenges for all actors in the payments-ecosystem,» she said in introductory remarks (in German only).

Payments Challenge

The goal of the representatives from traditional banking, financial start-ups, established infrastructure, and central banking was  to find common ground on how fintechs should receive access to the Swiss payment services infrastructure. 

The central bank is more interested in ensuring that payments infrastructure remains intact and that participants trust the system – and less to not so much to promote the new financial services industry.

Direct or Indirect Access

The SNB presented its tailor-made solution for the fintech industry three months ago. Faced with the choice of either granting direct access to the payment services infrastructure or granting access only via an established actor, the SNB opted for the direct solution. This stands in contrast to the European Union's approach.

The central bank offers fintech companies access to the SIC, or Swiss Interbank Clearing, system and SNB current account as long as two conditions are met: start-ups need a license as a fintech and a significant business model for payment services.

Maechler hopes that the system will help smaller players test the validity of their business model in the real world. Once they've outgrown the basic setup, they will need to apply for a banking license in any case, she emphasized.

The Other Option

One prominent example of the other alternative was also represented on the panel. Wildi's «Hypi» Lenzburg maintains an open infrastructure and invites fintechs to link up with the system of the bank.

«Our advantage is that we have a license and experience in dealing with the regulator,» said Wildi. «A bank is about more than just payment services. We will only survive if we can generate an additional benefit through our advisory services.»

In this setting, the established and the fintech startup both profit from each other, helping them to build on their respective strengths, Wildi said.

The Twint Way

SIX executive Menotti however was keen to emphasize how important it is for banks to retain the full control of the interface. Without it, banks may see their business model at risk, he added. Therefore, Swiss banking had been so persistent in finding their own digital payment solution – what has become known as Twint.

Whether the direct or indirect access to the payment services infrastructure provided by the SNB is the right way remains to be seen. It seems crucial however that the bank keeps its strong role in respect to the system even faced with the challenge by foreign actors that offer payment services. And, as Maechler emphasized, it is vital that the conditions are found that will enable fintech Switzerland to keep its leading position compared with other markets.