The Swiss government issued a report on "Areas of Action 2022+" in the field of digital finance on 2 February 2022. The report has to be read in the framework of the general strategy for a Digital Switzerland published in 2020 and outlines twelve areas of action. The report is evidence of the ongoing Swiss government support to FinTech and digitalization in the Swiss finance sector.
The government envisages the following measures:
New Ecosystems: the entry of new players such as FinTech startups but also of the big tech companies on the one hand and the breaking up of established value chains on the other hand shall be monitored and the regulatory and legal framework, if necessary, be adapted to increase efficiency. This includes regulatory and data protection issues relating to the use of cloud services.
Open Finance, Data Protection and Data Sharing: Today, Switzerland has no mandatory rules comparable to the EU PSD 2 regulation. However, the opening of interfaces and access to data is recognized as a key element for the further development of digital finance. Hence, the government will support such opening, but in co-operation with the financial market participants. A high priority is given to protection of client data and to enhance legal certainty on permitted uses of data. Any data sharing will have to consider client interests and the government will encourage the development of standards and usage rules. This also applies to cross-border data flows.
RegTech and SupTech: Obstacles to RegTech solutions and a further automation of supervisory authorities will be evaluated.
Cybersecurity: The National Center for Cyber Security is already in the process of implementing a project to increase cyber resilience in the finance sector. The government will further support such efforts.
Artificial Intelligence: The finance department is tasked to provide a report on legal and regulatory measures to support innovation and to reduce regulatory, legal and ethical risks.
Distributed Ledger Technology (DLT): Finma recently granted the first license to an investment fund investing in crypto currencies; further applications of DLT shall be evaluated and changes to the existing laws, in addition to the DLT act that became effective in 2021, shall be assessed, in particular for collective investment schemes.
GreenFinTech: The government intends to position Switzerland as a leading hub for green FinTech.
Innovation Hub: For years, Switzerland has been recognized as a leading innovation hub. The government now intends to establish a uniform platform for innovation in the finance sector, including the drafting guidelines for innovators.
Although the report only outlines areas of further government activity, it is relevant for market participants under several aspects:
Firstly, it clearly shows that the strong support granted by the Swiss government in the past to the development of the FinTech sector and to digital finance will continue. It thereby confirms that any market participants and enterprises interested in becoming active on the Swiss market can be assured that they work in a supportive regulatory environment.
Secondly, there is a strong emphasis in the report that the government is willing to further improve the legal and regulatory environment and also that any such improvements will be done in co-operation with market participants, so that there will be no unwelcome surprises.
Finally, the various measures envisaged will further strengthen existing private initiatives such as the Swiss Blockchain Federation or the Capital Markets and Technology Association which provide guidelines and standards for furthering the digitalization and the implementation of crypto projects in Switzerland. Hence, it can be expected that the existing reliable business, legal and regulatory environment will see an additional strengthening in 2022.
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