Financial Crime World

Compliance Risks Loom Large for Fintech Companies in Switzerland

As fintech companies continue to expand their operations in Switzerland, compliance risks are emerging as a major concern. With regulators issuing record levels of non-compliance fines and pending rulings such as GDPR, PSD2, and MiFIDII/ MIFIR, the need for effective regulatory technology (regtech) solutions has never been more pressing.

The Rise of Regtech

Swiss fintech companies are increasingly turning to regtech solutions that leverage software and automation to close compliance gaps, address new regulatory challenges, and cut costs. Regtech refers to technology and software created to address regulatory requirements and help companies stay compliant.

According to CB Insights, regtech companies have raised over US$6.2 billion across approximately 680 equity investments since 2013. In Europe, the UK is leading the industry in terms of funding and the number of regtech companies serving the financial services industry. However, Switzerland is quickly catching up, with now 30 ventures listed on Swisscom’s Swiss RegTech Map.

Leading Regtech Firms in Switzerland

Several Swiss regtech ventures have emerged as industry leaders:

  • Apiax: A Zurich-based company that offers a flexible technical solution that can be used for many different use cases. Apiax combines legal and compliance expertise with cutting-edge technology to help clients transform complex regulations into machine-readable digital compliance rules.
  • Qumram: An award-winning startup that captures digital activity and interactions to ensure compliance, prevent fraud, and improve customer service. Qumram’s solution has won several awards, including the Best Regtech Company in the 2017 Fintech Breakthrough Awards and the Growth Stage Startup of the Year in the 2017 Swiss Fintech Awards.
  • NetGuardians: A regtech player providing automated compliance management software and real-time human behavior analysis to detect fraud. The startup serves more than 50 international clients across Europe, Africa, and Southeast Asia.

Supporting the Regtech Industry

To support the growth of the regtech industry in Switzerland, the Swiss Chapter of the International RegTech Association (IRTA CH) aims to:

  • Foster an open and innovative ecosystem across industries
  • Promote collaboration between regtech providers, regulators, and industry organizations
  • Represent the interests of its members

By addressing compliance risks through effective regtech solutions, fintech companies in Switzerland can ensure a more secure and compliant operating environment.