The digitalization progresses unstoppable and reaches continuously more and more business fields. As many other industries, the financial industry experienced a rapid change, due to new opportunities and startups which took them. Marc P. Bernegger, who founded two successful startups himself, engages as an investor in the Fintech industry since 2010. STARTUPS.CH met with Mr. Bernegger to discuss with him the future of the fintech industry and the roll Switzerland may play in its development.
Mr. Bernegger, the companies you founded were connected with the digitalization, but they had nothing to do with the fintech industry. What was the reason behind your reorientation?
After co-founding two companies which were both acquired I wanted to move more into the investment side and I was always fascinated by the fact that the financial services industry was not really affected be the power of the digital revolution. So after my last exit in 2010 it was obvious to me to look into the (today so called) fintech space…
One subject which gained much attention within the fintech industry but also elsewhere, are cryptocurrencies. What is your opinion on the matter? Is this only a hype, or will Bitcoin and co. soon become a alternative to "normal money"?
I am happy to be in the crypto assets space since 2012 when I first got in touch with Bitcoin, long before the current hype took off. Already back then I was fascinated by the power of crypto currencies and the possibilities of the underlying technology blockchain.
Certainly there are elements of a hype at the moment, especially when you look at the prices for some cryptocurrencies and the crazy amounts of various ICOs. At the same time, a lot of new money is entering the crypto realm, so current conditions will persist for some time.
Federal council Schneider Ammann said in an interview, that Switzerland should become a crypto-nation. Do you think this is possible? and if yes, is Switzerland heading in the right direction?
As organizers of the Crypto Finance Conference in St. Moritz last January we are very proud that we had Swiss Federal Councilor Johann Schneider-Ammann on stage announcing the “Crypto Nation Switzerland”.
I think Switzerland's on the right track: conditions are generally favorable for blockchain and crypto firms, and a lot of international talent is coming to Switzerland and is taking care that the industry's black sheep don't follow.
Now, we have to use the current momentum to keep moving forward – other hubs are beginning to catch up and recognize the fundamental potential of blockchain on our economy and society.
In an interview with STARTUPS.CH one and a half years ago you said, Switzerland offers the ideal parameters for startups. Have you changed your opinion since then? How do you estimate the attractiveness of Switzerland for startups, which work in the blockchain industry?
With his liberal and entrepreneurial system Switzerland is a very attractive place to setup a business.
So far, there's few touch-points between the new crypto world and the traditional and established world of banking, but this will change very soon. Unlike with many areas of fintech, the effects blockchain-based applications and cryptocurrencies are simply too big for established finance to ignore.
Cryptocurrencies operate deliberately outside of governmental restrictions. But now there are ever more attempts to implement governmental regulations; just as the FINMA has done in the mids of February 2018, with regard to ICOs (Initial Coin Offerings). Do you think this is necessary? And how to you rate the legal system of Switzerland compared to the foreign?
I think it is important to have clear rules in the whole crypto currencies spaces including the regulation of ICOs. So far Switzerland and its regulator FINMA did a good job by not blocking developments caused by new technologies in this field which is the right approach.
Which legal aspect of cryptocurrencies and ICOs will become even more relevant and regulated in your opinion?
Customer protection will become far more relevant in future (which makes sense in my point of view).
A question for the investor in you: on what do you pay most attention by startups from the fintech industry or startups which are specialized on cryptocurrencies?
There is no difference to any other industry: You need a great team, solving a real problem and addressing a relevant market. Additionally I always look for passionate founders which is the essence of all successful startups.
A final question: what is your advice for startups, which want to succeed in the fintech industry?
Be aware that the regulatory framework in the fintech industry is far more complex than in other sectors and it takes longer to reach a critical size.Non molestiae maiores enim qui velit dicta facilis sed et. Nihil ratione eveniet sunt non nisi at. Nesciunt vel qui. Et corrupti occaecati deleniti odio ut dicta iure voluptates aliquid. Quia ut tempora possimus molestiae adipisci quod qui.
Thank you Marc for the very exciting interview.