FinTech Comparative Guide

1 Legal and enforcement framework

1.1 In broad terms, which legislative and regulatory provisions govern the fintech space in your jurisdiction?

Switzerland's fintech regulatory framework is well developed and designed to balance innovation with financial stability, investor protection, and anti-money laundering (AML) compliance.

a) Primary Legislative and Regulatory Framework

The core financial laws forming the backbone of fintech regulation are:

• Financial Market Supervision Act (FINMASA)
  Establishes the powers and responsibilities of FINMA (Swiss Financial Market Supervisory Authority), the key regulator overseeing banks, securities dealers, insurers, and fintech companies.
• Banking Act (BankA) and Banking Ordinance (BankO) –
  Govern the acceptance of deposits and lending activities.
  A "Fintech licence" (banking licence light) was introduced in 2019 under Art. 1b BankA, allowing fintechs to accept public deposits up to CHF 100 million without engaging in traditional lending or investment activities.
• Financial Services Act (FinSA)
  Regulates the provision of financial services and distribution of financial instruments (client protection, disclosure duties, etc.).
• Financial Institutions Act (FinIA)
  Provides a licensing and supervisory framework for asset managers, portfolio managers, trustees, and similar financial intermediaries.
• Anti-Money Laundering Act (AMLA)
  Imposes AML/KYC obligations on financial intermediaries, including fintechs handling client funds or digital assets.

b) Technology-Specific or Fintech-Relevant Regulations

• Swiss DLT (Distributed Ledger Technology) / Blockchain Framework (2021)
  Amendments to several laws (BankA, FinIA, FinSA, CO, etc.) introduced a DLT trading facility licence and legal recognition of tokenised assets.
  This makes Switzerland one of the first countries with a comprehensive legal basis for blockchain and cryptoassets.
• Payment Services and Crowdfunding
  There is no single "Payment Services Act" as in the EU; payment activities are instead regulated under BankA, FinIA, and AMLA depending on the business model.
  Crowdfunding platforms are subject to AMLA and, in some cases, FinIA supervision.
• Data Protection Act (FADP)
  Aligns with GDPR principles and governs the processing of personal data by fintechs, especially in areas like AI-driven financial advice, open banking, and payment processing.
• Various FINMA circulars provide guidance on digital financial services

1.2 Do any special regimes apply to specific areas of the fintech space?

Switzerland's fintech regulatory model is modular and activity-based — rather than a single "Fintech Act," it provides a toolbox of regimes (sandbox, fintech licence, DLT licence) that fit different business models.

Switzerland's Fintech Licence (2019, Art. 1b BankA) allows companies to accept deposits up to CHF 100 million without full banking regulation, provided they don't invest the funds or pay interest. This "banking licence light" reduces capital and organizational requirements, making it ideal for start-ups in payments, digital wallets, and crowdfunding—all under FINMA supervision.

The Regulatory Sandbox (Art. 6(2) BankO) offers an even lighter option: fintechs may accept up to CHF 1 million without any licence, as long as customers are informed deposits lack insurance protection and no interest is paid. This enables early-stage testing of innovations like peer-to-peer lending or crypto services before full licensing.

The DLT Framework (2021) legally recognizes tokenized assets ("DLT securities") and introduces a licence for DLT trading facilities, allowing direct trading and settlement of digital assets on blockchain platforms. It clarifies ownership rights and bankruptcy protection for token holders, integrating with existing financial laws. Switzerland was among the first to establish a comprehensive legal structure for digital asset markets under FINMA oversight.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

Swiss Financial Market Supervisory Authority (FINMA) – Main financial markets regulator; issues licences and supervises compliance with financial market laws.

Swiss National Bank (SNB) – Oversees payment systems and financial stability.

Federal Data Protection and Information Commissioner (FDPIC) – Oversees compliance with data protection rules.

Self-Regulatory Organisations (SROs) – Supervise AML compliance for non-bank financial intermediaries (important for smaller fintechs).

The FINMA is the central supervisory authority for fintech companies in Switzerland. It:

• Grants licences: FINMA issues fintech licences, reviews applications for DLT trading systems and monitors compliance with regulatory requirements.
• Monitors the market: It continuously supervises authorised fintech companies and ensures that they comply with legal requirements (e.g. capital requirements, money laundering regulations).
• Protects the financial system: FINMA ensures consumer protection, system stability and the integrity of the financial centre, including in the digital sector.
• Provides guidance: It publishes circulars, guidelines and supervisory notices on fintech topics (e.g. cryptocurrencies, ICOs, stablecoins), thereby creating legal certainty.
• Enables innovation: FINMA promotes controlled innovation in the financial sector by approving sandbox models and specialised licences.

1.4 What is the regulators' general approach to fintech?

Swiss regulators adopt a progressive, innovation-friendly approach while maintaining robust oversight. FINMA established a dedicated FinTech desk providing guidance to startups and has streamlined authorization processes. The regulatory sandbox allows testing without full authorization, demonstrating openness to innovation. The introduction of the FinTech License and DLT Act shows legislative willingness to adapt frameworks for new business models. FINMA applies technology-neutral, principle-based regulation focusing on activities rather than entities. Regular dialogue with industry participants helps shape practical regulations. However, Switzerland maintains high standards for consumer protection, financial stability, and AML compliance. The approach emphasizes proportionality—regulatory requirements scale with risk and business size. FINMA publishes guidance documents and FAQs to enhance regulatory clarity. While supportive of innovation, regulators remain vigilant about risks, particularly regarding crypto assets, cybersecurity, and consumer protection, reflecting Switzerland's reputation as a stable financial center.

1.5 Are there any trade associations for the fintech sector?

Several trade associations serve Switzerland's fintech sector, such as Swiss Finance Start-ups, www.swissfinancestartups.com/ or The Swiss FinTech Innovations (SFTI) represents fintech companies' interests and promotes industry development, www.swissfintechinnovations.ch) while others specialise in specific sectors like blockchain (such as the Swiss Blockchain Federation, https://blockchainfederation.ch/). The Crypto Valley Association, based in Zug, is a leading blockchain and cryptocurrency industry organization with significant global influence. Switzerland's SIX Digital Exchange operates the SDX, the world's first regulated digital asset exchange. The Swiss Bankers Association (SBA) includes fintech-related working groups.

2 Fintech market

2.1 Which sub-sectors of the fintech industry have become most embedded in your jurisdiction?

Switzerland's fintech landscape is particularly strong in blockchain and distributed ledger technology. Payment services and digital banking have significant presence, with neobanks and mobile payment solutions gaining traction. Wealth and asset management technology (wealthtech) is highly developed, reflecting Switzerland's traditional strength in private banking. RegTech solutions for compliance, KYC, and AML processes are increasingly important. Trading platforms and investment marketplaces have established footholds. Insurance technology (insurtech) is growing, covering areas from comparison platforms to parametric insurance. Lending platforms, including peer-to-peer and marketplace lending, operate successfully. Digital identity and authentication services support financial transactions. The cross-border payments sector benefits from Switzerland's international orientation. These sub-sectors benefit from Switzerland's stable political environment, skilled workforce, and strong financial infrastructure.

2.2 What products and services are offered?

Swiss fintech companies offer diverse products and services. Digital banking includes mobile-first banks providing current accounts, savings, and payment cards. Wealth management platforms offer robo-advisory services, automated portfolio management, and investment apps. Blockchain services encompass cryptocurrency exchanges, custody solutions, tokenization platforms, and smart contract development. Payment solutions include mobile wallets, cross-border payment services, and merchant acquiring services. Lending products feature peer-to-peer lending, invoice financing, and credit marketplaces. Insurance products include comparison platforms, on-demand insurance, parametric insurance, and insurance policy management. RegTech solutions provide KYC/AML automation, transaction monitoring, and regulatory reporting tools. Trading platforms offer retail investing apps, fractional ownership, and alternative asset trading. Digital identity solutions provide authentication and verification services. Financial data aggregation and PFM (personal financial management) tools help consumers manage finances. Many services leverage APIs for integration with traditional banks, embodying Switzerland's collaborative fintech ecosystem.

2.3 How are fintech players generally structured?

Swiss fintech companies typically structure as stock corporations (AG) or limited liability companies (GmbH), with AG being more common for growth-stage companies seeking external investment. Many establish headquarters in fintech hubs like Zurich, Zug (Crypto Valley), or Geneva. Companies requiring FINMA authorization structure to meet regulatory capital and organizational requirements. Some operate under banking licenses (traditional or fintech license), while others partner with licensed institutions to offer services. Blockchain companies may establish foundations (Stiftung) for decentralized governance, particularly for protocol development. Holding structures separate regulated entities from technology or IP subsidiaries. Many maintain lean operational structures, outsourcing non-core functions.

2.4 How are they generally financed?

Swiss fintech companies employ various financing strategies. Venture capital remains the primary source, with numerous domestic and international VCs active in Switzerland. Early-stage funding comes from angel investors and family offices, which are abundant given Switzerland's wealth concentration. Initial coin offerings (ICOs) and token sales were historically popular, though now subject to stricter regulation. Strategic partnerships with established financial institutions provide both funding and market access. Bank loans and credit facilities are accessible, particularly for later-stage companies. Crowdfunding platforms enable alternative fundraising, though less common than VC funding. Government grants and support programs, like Innosuisse, provide non-dilutive funding for innovative projects. Corporate venture capital from banks and insurers increasingly invests in fintech. Private equity enters at growth stages.

2.5 How are they positioned within the broader financial services landscape?

Swiss fintech companies occupy a collaborative position within the financial services landscape, often complementing rather than directly competing with traditional institutions. Major banks have established innovation labs, accelerators, and venture funds, actively partnering with fintechs. Many fintechs serve as technology providers to incumbent institutions, offering specialized solutions in areas like compliance, payments, or data analytics. The regulatory framework encourages partnerships through proportional regulation and licensing options. Some fintechs target underserved segments or niche markets traditional banks find less profitable. Digital-only banks compete directly with traditional retail banking but remain relatively small by market share. In wealth management, robo-advisors serve younger, smaller-balance clients, complementing private banking services. Insurance companies partner with insurtechs for distribution, underwriting, and claims processing. Payment fintechs integrate with banking infrastructure rather than replacing it. The ecosystem benefits from Switzerland's financial expertise, creating opportunities for knowledge transfer. Overall, the relationship is increasingly symbiotic, with collaboration driving digital transformation across the sector.

2.6 Do start-ups generally outsource back office functions and is there a developed market for them to access? What are the legal implications of outsourcing?

Swiss fintech startups frequently outsource back-office functions (IT infrastructure, compliance, customer service, accounting, HR, legal services) to specialized providers, including Swiss financial services vendors and international cloud platforms with local data centers.

FINMA may mandate that regulated entities retain full oversight and responsibility for outsourced activities. Contracts must ensure data protection compliance (particularly data residency and cross-border transfers), cybersecurity standards, and business continuity provisions. Companies remain fully accountable for regulatory compliance and operational resilience despite outsourcing.

3 Technologies

3.1 How are the following key technologies in the fintech space regulated and what specific legal issues are associated with each? (a) Internet (e-commerce); (b) Mobile (m-commerce); (c) Big data (mining); (d) Cloud computing; (e) Artificial intelligence; and (f) Distributed ledger technology (Blockchain, cryptocurrencies)

(a) Internet (e-commerce)

E-commerce in Switzerland is governed by technology-neutral principles with no specific fintech-only rules. Consumer protection laws apply to online financial transactions, requiring clear disclosure of terms, pricing, and cancellation rights. Distance selling rules under the Code of Obligations ensure consumers receive adequate pre-contractual information. E-signature legislation recognizes electronic signatures with varying legal weight depending on security level (simple, advanced, qualified). FinSA mandates specific disclosure requirements for online financial product distribution. Website operations must comply with data protection laws, requiring privacy policies and cookie consent. Payment Card Industry Data Security Standard (PCI DSS) applies to online payment processing. Accessibility requirements may apply under discrimination laws. Cross-border e-commerce faces jurisdictional challenges, particularly regarding regulatory scope and consumer protection.

(b) Mobile (m-commerce)

Mobile commerce in fintech follows the same regulatory framework as internet-based services, with no separate m-commerce regime. However, specific considerations apply: mobile payment services may require banking licenses if they involve deposit-taking or e-money issuance. Data protection rules require careful handling of mobile device data, including location information, with explicit consent for processing sensitive data.

Mobile wallet services must address AML/KYC requirements, potentially requiring identity verification before activation. Biometric authentication (fingerprint, facial recognition) raises privacy considerations under the data protection law. Overall, mobile fintech services must adapt traditional regulatory requirements to mobile-specific technical and user experience constraints.

(c) Big data (mining)

Big data analytics in fintech faces significant data protection constraints under the revised Swiss Data Protection Act (effective September 2023), which aligns Switzerland with GDPR principles. Key requirements include lawful basis for data processing (consent, contract, legitimate interest), purpose limitation preventing use beyond original collection purpose, data minimization requiring only necessary data collection, and transparency through clear privacy policies. Profiling, particularly automated decisions affecting individuals, requires explicit consent or legal basis. Financial data processing must respect banking secrecy obligations. Credit scoring and risk assessment using big data must be fair and non-discriminatory, with Swiss anti-discrimination principles applying. Data security measures must protect against breaches, with incident notification requirements. Cross-border data transfers require adequacy findings or appropriate safeguards.

(d) Cloud computing

Cloud computing in Swiss fintech is governed by FINMA Circular 2018/3 "Outsourcing – banks and insurers," which applies to regulated financial institutions. Key requirements include conducting thorough risk assessments before cloud adoption, maintaining adequate oversight and control over cloud providers, ensuring business continuity through redundancy and exit strategies, and protecting data security with encryption and access controls. Data localization considerations arise, with sensitive data preferably stored in Switzerland or adequate jurisdictions. Cloud contracts must provide audit rights for institutions and FINMA. Sub-outsourcing requires approval and transparency. Service level agreements should define availability, performance, and incident response. FADP compliance requires appropriate data processing agreements, particularly for international cloud providers.

Swiss Bankers Association has issued non-binding guidelines for the implementation of secure cloud computing services compliant with the law.

(e) Artificial intelligence

AI in Swiss fintech lacks specific regulation but falls under existing frameworks. FADP governs data processing, requiring lawful basis and purpose limitation. Automated decisions require transparency and, where applicable, human intervention rights. Explainability is expected, especially for credit/investment decisions. AI must avoid discriminatory biases and comply with equal treatment principles. FinSA conduct rules apply to AI-driven advice; robo-advisors must meet fiduciary standards. Risk management must address AI-specific risks (model drift, adversarial attacks). Deploying institutions bear full liability. FINMA monitors developments; industry self-regulation evolving. EU AI Act may influence Swiss approach.

(f) Distributed ledger technology (Blockchain, cryptocurrencies)

Switzerland is a global blockchain leader with comprehensive regulatory framework development. The DLT Act (effective August 2021) created legal certainty by introducing DLT securities with negotiability and collateral capability, establishing authorization for DLT trading facilities, and enabling segregated holding of crypto assets in bankruptcy. ICOs are regulated as securities offerings if tokens qualify as securities under FinSA. Utility tokens and payment tokens face lighter regulation. Cryptocurrencies are treated as assets but not legal tender. Exchange and custody services require various licenses depending on activities. AML regulations apply strictly to crypto intermediaries, requiring SRO membership or direct FINMA supervision. Tax treatment clarifies that crypto holdings are wealth tax-liable and trading generates taxable income. Smart contracts are legally recognized as valid agreements if meeting contract requirements. Banking secrecy doesn't automatically extend to crypto transactions. FINMA has issued multiple guidelines on ICOs, stablecoins, and DLT applications. Energy consumption concerns prompt ongoing dialogue about proof-of-work mechanisms. Cross-border crypto services face regulatory complexity. Overall, Switzerland's clear, innovation-friendly DLT regulation attracts blockchain companies while maintaining AML and investor protection standards.

4 Activities

4.1 How are the following key activities in the fintech space regulated and what specific legal issues are associated with each? (a) Crowdfunding, peer-to-peer lending; (b) Online lending and other forms of alternative finance; (c) Payment services (including marketplaces that route payments from customers to suppliers (eg, Uber and AirBnb); (d) Forex; (e) Trading; (f) Investment and asset management; (g) Risk management; (h) Roboadvice; and (i) Insurtech.

(a) Crowdfunding, peer-to-peer lending

The regulatory treatment of crowdfunding and peer-to-peer lending platforms depends largely on their specific structure. In principle, several laws may apply:

• The BankA regulates deposit business. Platforms that accept or manage customer funds may qualify as banks under certain circumstances. However, in order to promote innovation, Art. 1b BankA provides for a special FinTech licence with lower requirements, provided that no interest-bearing transactions are carried out and deposits do not exceed CHF 100 million.
• Under the so-called sandbox regulation, up to CHF 1 million in public deposits may be accepted without a licence, provided that no interest is paid and there are no risks for investors.
• Regardless of whether a licence is required, platform operators are generally subject to the obligations of the AMLA, either through direct affiliation with FINMA or via a self-regulatory organisation (SRO).
• If consumer loans are brokered or granted to private individuals, the Consumer Credit Act (KKG) also applies, particularly with regard to credit checks, information requirements and interest rate caps.

Project promoters and platform operators can operate without a banking licence below certain thresholds and structures. Nevertheless, they remain fully subject to money laundering regulations, particularly with regard to identification, monitoring and suspicious activity reports.

In practice, there are considerable legal challenges in structuring business models to avoid public deposits within the meaning of the Banking Act. The distinction between pure credit intermediation and deposit business requiring authorisation is often complex and depends heavily on the contractual and actual payment flows.

In addition, platform operators must implement robust AML/KYC processes to ensure proper identification and ongoing monitoring of a large number of small investors and borrowers.

Where consumer loans are brokered, the suitability and creditworthiness assessment requirements under the KKG and compliance with the statutory interest rate cap also apply. This combination of banking, financial market and consumer protection regulations makes crowdfunding models particularly challenging from a regulatory perspective.

(b) Online lending and other forms of alternative finance

Online lending platforms in Switzerland must navigate banking regulations carefully. Granting credit systematically as a business requires banking authorization under the Banking Act, with exemptions applying if lenders use entirely their own funds without accepting public deposits. Many platforms structure as intermediaries matching investors with borrowers, avoiding deposit-taking. Consumer credit requires compliance with the Consumer Credit Act, mandating creditworthiness assessments, standardized disclosure of total costs, and cooling-off periods. Interest rate caps don't apply generally but excessive rates may violate usury laws. Invoice financing and factoring may require authorization depending on structure. Marketplace lending platforms face AML obligations as financial intermediaries.

A key problem is the distinction between pure credit intermediation and proprietary credit business. While intermediary platforms do not generally require a banking licence, even economic involvement in lending or accepting customer funds can result in a deposit or credit business requiring authorisation under the Banking Act.

In addition, cross-border challenges arise, particularly when borrowers or investors are based abroad or when services are offered across borders. Such constellations can trigger additional regulatory requirements both in Switzerland and abroad.

(c) Payment services (including marketplaces that route payments from customers to suppliers (eg, Uber and AirBnb)

Payment services in Switzerland don't require specific authorization unless involving deposit-taking or e-money issuance. Payment initiation services (PIS) and account information services (AIS) lack dedicated regulation comparable to PSD2, though FinSA's financial service provider requirements may apply.

Accordingly, payment service providers (PSPs) and marketplace operators that forward or process customer payments are regulated within the framework of the existing legal basis. Many providers are affiliated with a FINMA self-regulatory organisation (SRO) and fulfil their due diligence obligations within the framework of this system.

An independent 'payment licence' – as provided for under EU law – does also not exist in Switzerland either. However, whether an activity is subject to authorisation under the BankA or FinTech authorisation depends crucially on the specific structure of the payment flows. If, for example, customer funds are temporarily accepted or managed via collective accounts, this may constitute a deposit business requiring authorisation.

The key challenge is to structure the trust or collective accounts correctly to ensure that no public deposits subject to authorisation within the meaning of the Banking Act are created.

In addition, payment service providers and marketplace operators must correctly identify and continuously monitor the beneficial owners in order to comply with the requirements of the Money Laundering Act.

Special attention must also be paid to the distinction from marketplace exemptions, which are significantly more narrowly defined in Switzerland than under EU PSD2. A detailed analysis of cash flows and contractual relationships is therefore necessary to ensure correct regulatory classification and avoid the risk of unintended licensing requirements.

(d) Forex

Foreign exchange (forex) services in Switzerland are regulated depending on the activity structure. Offering forex as a financial service may require authorization under FinIA if provided systematically. Banks naturally can offer forex services under their banking licenses. Currency exchange businesses require commercial registration and AML compliance through SRO membership as financial intermediaries.

Trading in foreign exchange (FX) is subject to differentiated regulatory treatment in Switzerland. Pure spot FX transactions, in which delivery and payment of the currencies take place within two banking days, are generally not considered financial instruments within the meaning of the Financial Services Act (FinSA) or the Financial Institutions Act (FinIA).

The situation is different for leveraged FX transactions, contracts for difference (CFDs) or other derivative transactions based on currencies: these may require authorisation as a securities firm under the FinIA in conjunction with the Financial Market Infrastructure Act (FinMIA). Such institutions are subject to comprehensive requirements with regard to organisation, own funds, risk management, internal control and reporting obligations to FINMA.

(e) Trading

Trading activities in Switzerland are comprehensively regulated under the FinMIA) and FinSA. Securities dealers require authorization if trading securities systematically, though exemptions exist for proprietary trading and certain limited activities. Trading platforms and multilateral trading facilities (MTFs) need authorization as trading venues. DLT trading facilities have dedicated authorization under the DLT Act.

Companies that trade in financial instruments require a licence as a securities firm (formerly: securities dealer) in Switzerland. These institutions are supervised by FINMA and are subject to comprehensive organisational, financial and compliance-related requirements.

Participation in trading on organised trading venues is governed by the FinMIA and the rules and regulations of the respective stock exchange, in particular the SIX Swiss Exchange. These rules and regulations contain detailed provisions on participation requirements, reporting obligations, transparency requirements and the obligations to ensure fair and orderly trading. In addition, there are specific transaction reporting requirements

Significant legal and operational challenges arise from compliance with market conduct rules, in particular those aimed at preventing market abuse, insider trading and market manipulation. This requires the establishment of an effective monitoring and control system that detects and reports suspicious trading patterns.

In addition, institutions must have robust reporting and documentation processes in place to properly fulfil their legal reporting obligations to FINMA and the trading venues.

Last but not least, the high demands placed on IT systems, cyber resilience and operational continuity pose a considerable challenge. Trading infrastructures must be operated securely, stably and in a tamper-proof manner at all times in order to meet both regulatory standards and the conditions for participation on trading venues.

(f) Investment and asset management

Investment and asset management in Switzerland requires authorization under FinIA. Asset managers managing client portfolios require asset manager authorization from FINMA if exceeding de minimis thresholds (CHF 100 million AUM for institutional clients; any amount for retail). Portfolio managers and investment advisors need authorization if systematically providing services. Fund management companies operating collective investment schemes require specific authorization. In particular, they must have an appropriate organisational structure, sufficient capital and effective risk management and control systems.

In addition, the conduct and information requirements under the FinSA apply to the provision of financial services. FinSA imposes conduct obligations including client classification, suitability and appropriateness assessments, best execution, and conflict of interest management. Documentation requirements mandate client agreements and periodic reporting. Fee transparency and disclosure are required. Delegation and outsourcing of portfolio management must comply with FINMA requirements maintaining oversight.

(g) Risk management

Risk management in Swiss fintech is fundamental to regulatory compliance. FINMA expects regulated entities to maintain robust risk management frameworks covering operational, financial, legal, and reputational risks. The relevant provisions are scattered across various laws, ordinances and FINMA regulations.

The main challenges lie in compliance with anti-money laundering and counter-terrorism financing obligations (AML/CTF), particularly with regard to identifying and verifying counterparties (KYC) and ongoing monitoring of transactions.

In addition, there are high requirements for information and communication technology (ICT) and the cyber resilience of companies in order to ensure the security, availability and integrity of systems at all times.

In the case of outsourcing, contractual and regulatory requirements must be carefully implemented to ensure effective management and control.

Finally, it must be demonstrated to FINMA that the company has an 'appropriate organisation' within the meaning of the supervisory regulations – i.e. clear responsibilities, functioning control mechanisms and effective risk management.

(h) Roboadvice

Robo-advisory services in Switzerland fall under FinSA and FinIA regulation. Discretionary robo-advisors managing client portfolios require asset manager authorization under FinIA if exceeding thresholds. Pure advisory robo-advisors providing recommendations without discretion face lighter requirements but must comply with FinSA conduct rules. Client classification determines applicable rules, with stricter requirements for retail clients. The distinction between advisory services and asset management is not always straightforward in this context.

Risk profiling questionnaires must adequately capture client circumstances, knowledge, experience, and objectives. Algorithm transparency is expected, with clients understanding the basis for recommendations. Human oversight remains important, with escalation procedures for complex situations.

Robo-advice is permitted but must meet the same fundamental investor protection standards as traditional advice, adapted for digital delivery.

(i) Insurtech

Insurtech in Switzerland operates under the Insurance Supervision Act (ISA). Underwriting insurance requires authorization from FINMA as an insurance company, with capital and organizational requirements. Insurance intermediaries (brokers, agents) face registration requirements and professional qualifications.

Digital distribution channels must provide clear product information and policy documentation. Embedded insurance sold through non-insurance platforms requires clear communication of insurance nature.

5 Data security and cybersecurity

5.1 What is the applicable data protection regime in your jurisdiction and what specific implications does this have for fintech companies?

Switzerland's revised Federal Act on Data Protection (FADP), effective September 2023, significantly strengthened data protection aligned with GDPR principles. Key requirements for fintech companies include: lawful processing basis (consent, contract performance, legal obligation, vital interests, or legitimate interests), purpose limitation preventing data use beyond original collection purposes, data minimization requiring processing only necessary data, accuracy obligations ensuring data correctness, storage limitation requiring deletion when no longer needed, and security measures protecting against unauthorized access. Transparency obligations mandate clear privacy notices explaining data processing. Individual rights include access, rectification, erasure, data portability, and objection to processing. Profiling, especially automated decision-making significantly affecting individuals, requires explicit consent or legal basis. Data breach notification to the Federal Data Protection and Information Commissioner is mandatory for high-risk breaches, with client notification in certain circumstances. Cross-border data transfers require adequacy decisions or appropriate safeguards. Privacy by design and by default principles should guide system development.

5.2 What is the applicable cybersecurity regime in your jurisdiction and what specific implications does this have for fintech companies?

Switzerland lacks comprehensive cybersecurity-specific legislation but regulates through sector-specific requirements and general obligations. FINMA expects financial institutions to implement robust cybersecurity measures as part of operational risk management.

The Swiss Financial Market Supervisory Authority (FINMA) has identified cyber risks as among the most critical operational threats facing the Swiss financial sector, particularly concerning the availability, confidentiality, and integrity of essential services. FINMA's supervisory approach rests on three fundamental pillars: threat analysis, continuous supervision, and incident and crisis management.

In June 2024, FINMA released Guidance, which consolidates findings from its cyber-risk supervision activities, clarifies reporting obligations for regulated institutions, and highlights systemic weaknesses, with outsourcing emerging as a particularly significant vulnerability.

Supervised financial institutions face several critical obligations under FINMA's framework. They must immediately report cyber incidents of substantial importance. Additionally, institutions are expected to conduct scenario-based cyber resilience exercises, including table-top simulations and red teaming activities, while maintaining robust governance structures and comprehensive ICT and cyber risk management programs that cover business continuity and cross-border service risks.

Failure to comply with these expectations may result in supervisory intervention and significant reputational and operational consequences for affected institutions.

6 Financial crime

6.1 What provisions govern money laundering and other forms of financial crime in your jurisdiction and what specific implications do these have for fintech companies?

Switzerland's AMLA imposes comprehensive obligations on fintech companies as financial intermediaries. Key requirements include: customer due diligence (CDD) involving identity verification, beneficial owner identification, and understanding business relationships' purpose and nature. Enhanced due diligence applies to higher-risk situations including PEPs (politically exposed persons), high-risk jurisdictions, and complex ownership structures. Ongoing monitoring requires transaction surveillance and profile updates. Record keeping mandates retaining documentation for ten years. Suspicious transaction reporting to the Money Laundering Reporting Office Switzerland (MROS) is mandatory when money laundering is known or suspected. Training staff on AML obligations is required. Financial intermediaries must affiliate with a self-regulatory organization (SRO) for supervision or obtain direct FINMA authorization.

FinTech companies face particular challenges with digital identity verification, often using video identification or e-ID solutions approved by SROs. Blockchain and cryptocurrency activities face heightened scrutiny given anonymity concerns. Cross-border payment services require robust sanctions screening. Failure to comply results in criminal liability for individuals and entities. Recent regulatory focus addresses virtual asset service providers (VASPs) and travel rule implementation.

AML compliance is non-negotiable and resource-intensive for Swiss fintech firms.

7 Competition

7.1 Does the fintech sector present any specific challenges or concerns from a competition perspective? Are there any pro-competition measures that are targeted specifically at fintech companies?

Switzerland's fintech sector presents unique competition dynamics. Traditional market concentration among major banks creates high barriers to entry, though fintech innovation challenges incumbents. Competition concerns include: data access and portability affecting fintech ability to compete (addressed partially through market-driven open banking initiatives rather than mandated PSD2-style access), network effects in payment systems and platforms creating natural monopoly tendencies, and interoperability challenges when proprietary systems hinder competition. Exclusive agreements between banks and fintech providers may raise foreclosure concerns. However, pro-competition measures include the fintech license enabling new entrants without full banking infrastructure, regulatory sandbox permitting experimentation, proportional regulation avoiding excessive burden on smaller players, and FINMA's technology-neutral approach preventing incumbent preference.

Government digital identification systems may enhance competition by reducing KYC barriers. Switzerland's regulatory approach generally facilitates fintech competition, though data access and incumbent advantages require ongoing attention.

8 Innovation

8.1 How is innovation in the fintech space protected in your jurisdiction?

Innovation protection in Swiss fintech utilizes multiple mechanisms. Patents protect technical inventions meeting novelty, inventive step, and industrial applicability requirements, with the Swiss Federal Institute of Intellectual Property handling applications. Software patents face restrictions but business methods with technical character may qualify. Trade secrets protect confidential business information including algorithms, models, and processes, with legal protection against misappropriation under unfair competition law. Copyright protects original software code and creative works, automatically arising upon creation. Trademarks protect brand identity, registered through the IP Institute. Database rights protect substantial investments in database creation. Know-how and proprietary methodologies are protected contractually. Employment agreements should address IP ownership and confidentiality. Non-compete and non-solicitation clauses restrict employee mobility (limited to three years). Licensing agreements enable monetization while retaining ownership. Open-source considerations affect software development choices. International protection requires parallel filings (Patent Cooperation Treaty, Madrid System for trademarks). Switzerland's strong rule of law and efficient judicial system support IP enforcement. Specialized IP courts handle disputes. Criminal sanctions apply to certain IP violations. Overall, comprehensive IP protection enables fintech innovation to be safeguarded, though companies must actively secure rights through registration and contractual arrangements.

8.2 How is innovation in the fintech space incentivised in your jurisdiction?

Switzerland incentivizes fintech innovation through multiple channels. Regulatory measures include FINMA's fintech license reducing entry barriers, the regulatory sandbox enabling testing without full authorization, fast-track authorization for certain fintech models, and DLT Act provisions encouraging blockchain innovation. Financial support comes from Innosuisse (Swiss Innovation Agency) providing grants and funding for innovative projects, including R&D partnerships with universities. Cantonal innovation programs offer additional funding. Tax incentives include patent box regimes with reduced taxation on qualifying IP income, R&D tax relief at cantonal level, and favorable capital gains treatment for investors. Infrastructure support encompasses innovation parks and incubators in Zurich, Zug, Geneva, and Lausanne, university technology transfer offices facilitating commercialization, and the Swiss Finance + Technology Association promoting ecosystem development. Academic collaboration is strong, with leading universities (ETH Zurich, EPFL) producing fintech talent and research. Switzerland's multi-faceted innovation ecosystem combining regulatory flexibility, financial support, strong academic institutions, and favorable business environment creates compelling conditions for fintech innovation and growth.

9 Talent acquisition

9.1 What is the applicable employment regime in your jurisdiction and what specific implications does this have for fintech companies?

Switzerland's employment regime affects fintech companies significantly. Employment relationships are flexible with limited statutory protection compared to many European jurisdictions, enabling easier termination with notice periods based on tenure (generally one to three months). Fixed-term and permanent contracts are permitted. Collective bargaining agreements are less prevalent than in neighboring countries. Wages lack statutory minimum (except in certain cantons), allowing market-determined compensation. Working time regulations mandate maximum hours but offer flexibility for management and specialists. Employee benefits include mandatory social security contributions (AHV/AVS), occupational pension plans (BVG/LPP), accident insurance, and unemployment insurance. Compliance costs for benefits are significant. Employment contracts should address IP ownership, confidentiality, non-compete clauses (maximum three years), and data protection. Work permits are required for non-Swiss/EU citizens, with quotas limiting numbers. Specialized talent often qualifies for preferential treatment. Switzerland's employment framework offers flexibility attractive to startups while requiring careful compliance with social insurance and work permit requirements.

9.2 How can fintech companies attract specialist talent from overseas where necessary?

EU/EFTA Citizens: Freedom of movement—no quotas, straightforward residence permits.

Third-Country Nationals: Subject to quotas and strict requirements. Work permits (B/L permits) prioritize Swiss/EU candidates. Highly qualified specialists, managers, and graduates in shortage occupations receive preferential treatment. Companies must prove specialist qualifications are required and local candidates unavailable. Minimum salary typically CHF 120,000+ for preferential processing.

Facilitation Options: Intra-company transfers for existing employees; cantonal startup visas for entrepreneurs; six-month residence extension for Swiss university graduates seeking employment.

Considerations: Remote work from abroad triggers tax/social security complexities. Language skills (German/French/Italian) not required for permits but aid integration. Fast-track processes available for certain categories.

Bottom Line: Challenging for non-EU talent, but Switzerland's reputation and quality of life attract top specialists and senior roles where quota systems favor approvals.

10 Trends and predictions

10.1 How would you describe the current fintech landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Switzerland's fintech landscape in 2025 is characterized by maturation and consolidation. Key trends include continued blockchain and digital asset leadership, with Switzerland maintaining its "Crypto Valley" position as regulatory clarity attracts projects. DeFi (decentralized finance) applications are growing under existing frameworks. Central Bank Digital Currency (CBDC) exploration continues, with the Swiss National Bank piloting wholesale CBDC projects. Traditional banks accelerate digital transformation, increasingly partnering with or acquiring fintechs. Embedded finance integrates financial services into non-financial platforms. ESG (Environmental, Social, Governance) fintech addressing sustainable finance gains prominence. RegTech and SupTech (supervisory technology) expand as compliance complexity increases. AI adoption in risk management, fraud detection, and customer service accelerates. Cybersecurity investment intensifies amid rising threats. Overall, Switzerland's fintech sector remains dynamic, innovation-friendly, and globally competitive.

11 Tips and traps

11.1 What are your top tips for fintech players seeking to enter your jurisdiction and what potential sticking points would you highlight?

Regulatory Strategy Engage FINMA's fintech desk early for regulatory clarity. Use the regulatory sandbox to test your model before pursuing full authorization. Structure operations carefully to avoid inadvertently triggering banking or securities dealer licensing requirements.

Compliance Foundations Build robust AML/KYC systems from day one. Register as a financial intermediary when required. Ensure FADP data protection compliance—it's more complex than it appears. Implement strong cybersecurity measures and understand banking secrecy obligations where applicable.

Market Access & Structure Establish banking relationships early for payment system access. Form a Swiss entity (AG structure recommended for scaling) with proper governance. Plan adequate capital for regulated activities. Address cantonal requirements, particularly for insurance intermediation.

Expertise & Support Hire local legal and regulatory experts—don't go it alone. Leverage Innosuisse and industry associations for innovation support. Secure work permits for non-EU talent well ahead of hiring. Protect IP through registration and contracts.

Critical Pitfalls Don't underestimate data protection complexity, trigger unintended deposit-taking rules, underfund capital requirements, assume EU passporting rights exist, overlook cantonal regulations, neglect tax optimization, or misunderstand cross-border service limits.

Bottom Line Switzerland offers exceptional fintech opportunities within a sophisticated regulatory environment. Success requires proactive compliance planning and early professional guidance. The investment in proper navigation pays dividends.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.