New data on Swiss fintech market, partial unemployment benefits

Fintech paradise

Switzerland has been trying for a few years now to establish itself as country open for fintech, blockchain technology and cryptocurrencies online exchange platforms, start-ups and other businesses relying on digital currencies. Some recent research seems to confirm that the change of Switzerland’s reputation – from safe banking country to innovative fintech hub – is going quite well and progressing. Cryptovalley.directory provides an interactive map with as any as 350 blockchain companies, legal and consulting firms, educational institutions and others spread all over the country. The map confirms that Zug and Zurich region are the Crypto Valley, as most of companies are based there. But also, other regions, as southern one, Italian speaking and western one, French speaking can boast of many entities relying on blockchain. Recently published report by the Institute for Financial Services Zug shows how many solely fintech companies existed at the end of last year in Switzerland. The number is impressive – 220, which is 30 up comparing to 190 in 2016. Those are roboadvisory, digital payments, software as services providers. Insurance tech and proptech or regtech companies didn’t make the cut, as authors of reports focused solely on pure, narrowly-understood fintech business. The report also display financial numbers for fintech industry – the funding for Swiss companies in this field was at CHF 400 million, which is a huge increase comparing to just CHF 50 million in 2016. Probably, the Initial Coin Offering fever that took place last in Switzerland was partially responsible for getting so big amount in funding. ICO capital generated CHF 860 in 2017, and out if this CHF 276 were raised by companies operating in fintech.

Partial unemployment benefit saved many job posts

In 2009 as the crisis swept the world, and Switzerland, job market was severely hit. Revenues fell by 70% in machine tools sector and many jobs were in danger. The economics minister Doris Leuthard decided to act and introduced many solutions in fast manner, that in her opinion would ease the impact of the crisis on the industry. She introduced new, easer conditions to receive partial unemployment benefits and lengthen the insurance cover period to 13 months from 12, that soon was further prolonged to 24 months. As a result, in 2009 as many as 90,000 employees were put on partial unemployment in Switzerland, comparing to less than 5,000 a year before. The partial unemployment works like that: the employer reduces working hours, the staff agree to that, and employees receive part of salary and part of benefits from the partial unemployment basket. It was obviously, very costly – in 2009 itself the government paid CHF 1.1 billion of benefits. Thus, there were voices that solution was expensive and non-effective, as some claimed it only put off sacking employees to a later date. However, the new analysis provided by the federal technology institute Zurich and mandated by SECO shows that the partial unemployment system indeed helped to save jobs in years between 2009 and 2015. To be precise, at least 10% of job posts were saved by some of companies. The authors of the report, point out that as a result the costs undertaken by the system were in huge part were offset by savings that were made in permanent unemployment benefits system. Instead of paying benefits for laid off employees, the government added to salaries of partially unemployed employees, out of which some managed to come back to be fully employed by their respective companies.