The Swiss Fintech licence is a regulatory framework designed to promote innovation within the financial sector. This licence allows Fintech companies to operate with greater flexibility compared to traditional banking licences. Particularly in the areas of payments and digital financial services.
Fintech License Switzerland – How to get it
Background
Driving Innovation
The Swiss Fintech licence is regulated under Article 1b of the Swiss Banking Act. It allows financial institutions to commercially accept public deposits of up to CHF 100 million. Such deposits are held without being invested or earning interest.
This measure aims to reduce barriers for fintech companies entering the market. The provisions of the Banking Act still apply with necessary adjustments. If a company surpasses the CHF 100 million limit, it will require a full banking licence. The Fintech licence, therefore, serves as an intermediary step between the sandbox (allowing the acceptance of public deposits up to CHF 1 million without a licence) and a full banking license.
Business Cases for Swiss Fintech license
The Swiss Fintech licence accommodates a wide range of business models. This flexibility allows emerging and yet-to-be-developed business models to potentially benefit from the eased regulatory requirements. It is particularly advantageous for companies that offer services similar to those of banks but do not engage in traditional core banking activities.
The Fintech licence is especially relevant for businesses that involve holding customer funds. This practice previously required a full banking licence, with few exceptions. With the new licence, companies can accept public deposits of up to CHF 100 million without needing a full licence.
Digital Payment Platforms
Companies offering digital wallets or mobile payment services that facilitate transactions between users. They can also offer an interest free deposit business.
Crowdfunding Platforms
Fintech companies providing platforms for crowdfunding, where the collected funds are held temporarily before being disbursed to project owners.
Cryptocurrency Exchanges
Businesses operating cryptocurrency exchanges, where users can buy, sell, or hold digital assets. They can utilize the Swiss Fintech licence to manage client funds in FIAT currencies.
Peer-to-Peer Lending
Fintech companies facilitating peer-to-peer lending, where individuals can lend money to others directly through an online platform.
What are the requirements for a Swiss Fintech Licence?
FinTech License Requirements:
| Minimum Capital | CHF 300’000.- or 3% of deposits |
| Capital and Liquidity Requirements | None |
| Deposit Guarantee | None |
| Public Deposits | Max. CHF 100 million |
| Use of Deposits | Deposit business only (no interest margin business) |
| Supervision and Monitoring | Reduced requirements on auditor compared to a full banking licence |
| Accounting | As per Swiss Code of Obligations |
How long does it take to get a Fintech License in Switzerland?
Obtaining a fintech licence in Switzerland involves several key phases, from preliminary checks to final operational implementation. Each phase requires specific actions, such as preparing the application, responding to regulatory queries, and setting up the necessary infrastructure to meet compliance requirements.
The process is divided into several phases, each with its own timeline and set of activities:
Phase 1: Preliminary checks and presentation to FINMA (1–2 months)
This early-stage phase involves conducting preliminary checks and preparing a presentation for FINMA. During application preparation, the company makes initial contact with FINMA to discuss the application and the business plan.
Phase 2: Preparing the application (2–4 months)
In this phase, the company prepares the detailed licence application. This includes gathering all necessary documentation, developing internal policies, and ensuring compliance with regulatory requirements. In addition, an initial audit report must be prepared by an external auditor.
Phase 3: Responding to FINMA’s questions and additional requirements (3–6 months)
After submitting the application, FINMA reviews the documents and may request additional information or clarification. During this phase, the company must respond to FINMA’s questions and fulfill any further requirements. FINMA will confirm the formal completeness of the application.
Phase 4: Implementation (3–6 months)
Once FINMA grants conditional approval, the company enters the operational implementation phase. This involves putting into place any remaining organizational structures and processes to comply with the regulatory framework. After confirming that all conditions are met, FINMA will grant the full fintech licence. This will allow the company to begin its regulated activities.
This process, from initial checks to the granting of the full Swiss fintech license, can take anywhere from 9 to 18 months. It depends on the complexity of the application and the speed at which the company fulfills FINMA’s requirements.
How much does it cost to get a Swiss Fintech Licence?
FINMA is responsible for issuing fintech licences and overseeing fintech companies in Switzerland. Similar to a banking licence, obtaining a fintech licence incurs costs covered by fees and supervisory levies. FINMA has added a section to its Fees and Levies Ordinance for fintech companies.
The supervisory levy includes a fixed base fee of CHF 3,000. Additional variable fee based on the company’s balance sheet and gross income apply.
Additionally, FINMA estimates further costs for financial and regulatory audits at around CHF 50’000. This is significantly lower than for a regular banking licence.
Beyond FINMA’s fees, obtaining a fintech licence involves several additional expenses. If the application process takes 18 months, the total costs can be estimated as follows.
Exemplary fee estimate:
- Consultancy fees: CHF 30’000 – CHF 100’000
- Internal employees: CHF 120’000 – CHF 250’000 per employee annually (for 5 employees over 18 months: CHF 750,000 – CHF 1,875,000)
- Office space: CHF 4’000 – CHF 10’000 monthly (for 18 months: CHF 72,000 – CHF 180,000)
- IT-Infrastructure and consulting: approx. CHF 100’000 (for 18 months)
- Accounting fees: CHF 15’000 – CHF 35’000 for 18 months (accounting based on Swiss Code of Obligations)
- Auditor fees and initial audit report: CHF 40’000 – CHF 50’000
- FINMA fees (including supervisory levies): CHF 3’000 (base fee) + CHF 50’000 for audit-related expenses
The total estimated cost of obtaining a fintech licence ranges from approximately CHF 1.1 million to CHF 2.4 million.
In case the Swiss Fintech plans to offer payment solutions (e.g. FIAT) with 3rd party banks and payment providers the following additional estimated IT costs will incur:
- Core banking and interbanking infrastructure: CHF 750’000
The total estimated cost of obtaining a fintech license in Switzerland, including the additional IT costs for offering payment solutions (e.g., FIAT) with third-party banks, ranges from approximately CHF 1.8 million to CHF 3.2 million.
Ways, we can support you
We can assist you in effectively aligning your business model with legal and regulatory requirements.
We offer comprehensive support across several key areas to help you navigate the complexities of the fintech landscape:
- Business strategy development
- Legal and regulatory guidance
- Compliance management (including KYC and Anti Money Laundering (AML))
- Technology solutions (including provider selection and software implementation)
Our team and network of subject matter experts ensures you have the expertise and resources needed to drive your business forward.
Die Experten der Peak Compliance stehen Ihnen jederzeit gerne zur Verfügung.
