In 2017, the Swiss Federal Council proposed to allow younger companies and especially Fintech firms to accept public deposits as part of their business activities. These amendments should attract innovative Fintech businesses and create favorable conditions for Switzerland to compete with jurisdictions such as the UK, Singapore and Hong Kong.
Under the new “Fintech” license category this is now possible since 1 January 2019. What does this mean? Licensees may accept deposits from the public in the amount of up to CHF 100 million. However, the new license does not allow Licensees to invest the deposits or to pay interest on them. These activities remain reserved for banks. Furthermore, the Fintech License is subject to certain conditions concerning organization, risk management, compliance, accounting and financial resources.
While the approach taken by the Swiss regulator differs significantly from other jurisdictions, the Fintech License can be an attractive option for Fintech firms such as payment providers. Also, the revised regulation may still provide space for banks to advance into the Fintech sector by making use of the alleviations provided to Fintech Licensees under certain conditions.