In its latest attempt to encourage innovation in the fintech industry, Switzerland has modified its Banking Act to include new provisions for fintech authorisation regulations. 

As of January 1, 2019, firms that operate above and beyond the ordinary characteristics of lenders will be eligible for the new licensing regime, allowing them to accept public funds of up to CHF 100 million ($100.2 million), on the grounds that they neither opt to invest or pay interest on these funds. 

The amendments to the Banking Act were brought into force by the Federal Council, during a meeting held earlier today. In addition to the changes made today, the Federal Council has also chosen to broaden its regulatory sandbox to include crowdlending business models. This will gift crowdlending firms the opportunity to have access to up to CHF 1 million in public funds, both for private use as well as commercial and industrial consumption. 

The new fintech proposals were originally outlined by the Federal Council in February 2017. Back then, the Federal Council proposed three measures to promote innovation in the fintech sector, all of which were put up for review. 

Two of these three measures; the setting up of the regulatory sandbox and extended holding period for settlement accounts, were put into action back in August 2017, but new authorisation measures and modification to banking laws had not been approved or put into action up until the latest meeting. 

The third and final measure – a new authorisation category with updated necessities in the Banking Act – is finally set to be implemented as of the beginning of next year. 

Due to the fact that it will take a certain amount of time for the last measure to be fully implemented, modifications to consumer credit law and the associated amendment of the Bank Ordinance will not come into full force until April 1, 2019.