The Swiss Fintech Licence 2024: An Overview
- Corinne Blessing
- Nov 5, 2024
- 2 min read
Updated: Feb 4
The Swiss Fintech Licence, often known as "banking light," offers an innovative, regulated framework for financial technology companies seeking a streamlined pathway to provide financial services without the full obligations of a traditional banking licence. Introduced in 2019, this licence has quickly gained popularity among neobanks, payment institutions, and businesses interested in accepting public deposits in Switzerland.
What is the Swiss Fintech Licence?
The Swiss Fintech Licence provides a simplified regulatory model under the Swiss Banking Act (Art. 1b) and is governed by the Swiss Financial Market Supervisory Authority (FINMA). With its focus on innovative financial services, it allows companies to operate in a regulated environment while enjoying greater flexibility than a full banking licence offers. The licence is particularly beneficial for companies that wish to provide payment and deposit services without engaging in asset management. As of June 2024, there are currently five licence holders, with numerous additional applications under review by FINMA.
Key Services Allowed under the Fintech Licence
The licence enables companies to offer a range of services similar to those of traditional banks, including:
Account Services: Fintech licence holders can provide clients with multi-currency IBANs, including their own SWIFT-BIC numbers. Additionally, companies can issue their customised Swiss IBANs, making it possible to operate independently of traditional banks.
Public Deposit Acceptance: Fintech licence holders can accept public deposits up to CHF 100 million. However, in specific cases (e.g., deposits from corporates with professional treasury management or settlement accounts for transaction processing), exceptions allow for even higher amounts.
Global Payment Services: The licence enables businesses to handle global payments in major currencies, including CHF, EUR, USD, and JPY. This service is crucial for companies operating with an international client base.
Card Services: Fintech licence holders can issue debit and prepaid cards under their own or client brands, gain access to card networks, and obtain unique BIN numbers. This enables a streamlined payment experience for cardholders and merchants alike.
Crypto Services: The Swiss Fintech Licence also covers crypto-related services, including custody of digital assets, exchange platforms for crypto and fiat, wallet services, staking, and on/off ramp solutions. This makes it an ideal choice for Fintechs operating in both fiat and crypto markets.
Additional Financial and Non-Financial Services: Besides financial services, licence holders may offer tech and intermediary solutions, such as foreign currency exchange, commodity and precious metals trading, core banking platforms, and open banking services through APIs.
Advantages of the Swiss Fintech License
The Swiss Fintech license offers numerous advantages, allowing companies to operate fully independently of traditional banks while building trust through FINMA regulation. License holders further benefit from Switzerland's Fintech landscape, recognised as one of the leading innovation hubs globally, as well as from a clear legal framework and attractive tax conditions.
Path to the License: Process and Timeline
The application for a Fintech license involves several stages, from developing a business plan and selecting IT infrastructure to the final submission and review of documents by FINMA. Due to its complexity, the entire process can take up to a year or longer. Preparations include areas such as risk management, compliance frameworks, and financial planning.