Switzerland is a country known, among other things, for its friendly regulatory environment for new technologies. It makes no exception even for blockchain and digital currencies. Startups associated with this industry have in particular spotted the city of Zug and its close vicinity. As a result, the area was given the name of a Swiss crypto-valley. However, innovative industries have started to pave their way in the territory previously reserved only for traditional banking, with which Switzerland is so often associated.
Changes within Zurich itself
The building in the centre of Zurich, Bahnhofstrasse, is the best example of the changes taking place in Switzerland in recent years. Until recently, it was the seat of a private bank and is now the centre of blockchain technology development. More than 40 companies in the digital currency industry are located at this address.
Zurich, a city with more than 430,000 inhabitants, is getting out of the informal control of bankers every day. Between 2007 and 2017, the share of the financial sector decreased by almost 20%. It is conditioned by, among other things:
- stricter legal regulations
- compromised trust in Swiss banking secrecy
- low interest rates
- numerous management scandals.
Who takes the place of traditional banks?
as we all know, reality hates a vacuum. Both the attractive tax regulations and the location and the presence of a high ranked university (we mean ECH Zurich) have caused a wave of giants of new technologies to come to Zurich. It is in this city that Google and Facebook have located their branch. The Disney branch also found a quiet harbor here.
The new technology sector in Zurich increased by 50% in the aforementioned period (2007-2017). At the same time, the banking sector has seen a 20% decline. Not without significance here are startups. Last year alone, Zurich attracted venture capital investments worth a total of USD 517 million. The great popularity of the Zug region also began to move to the neighboring areas, which include Zurich. According to data from 2018, 114 companies from the fintech industry have their registered offices in the Zug region.
A few words about the downsides of Zurich
Zurich, like any other location, also has its drawbacks. The most important of these are:
- very high maintenance costs
- problems with finding new clients
- problems with recruiting suitably qualified staff
- high labour costs
- the small population of Switzerland
- a specific culture characterised, inter alia, by a high degree of suspicion of risk.
The current rise of the new technology sector in both Switzerland and Zurich should not be seen as a departure from traditional banking. But rather as breaking stereotypes and opening the minds of the inhabitants to new developments.