A new study in Switzerland shows that fintech in the country is greatly growing, but traditional financial institutions have been coming to a standstill at their own peril.

The “FinTech Study 2019”, conducted by the Institute of Financial Services Zug (IFZ) under the Lucerne University of Applied Studies and Arts, reveals that the Swiss fintech sector has grown by 62%, with 356 active firms by the end of 2018.

Fintech companies are reportedly faster and more efficient when it comes to implementation and deployment of new technologies. With 68 funding rounds within a year, 2018 was a record year for venture capital investment in the Swiss fintech industry.

On the other hand, the number of institutions and workers of traditional banks witnessed a decline. That banks must evolve or become irrelevant is becoming apparent. The report reads:

“Swiss financial industry to the total income of the Swiss economy is a consequence of the steadily decreasing relevance of traditional financial institutions. Reasons for this development include new business models, that make some services provided by banks obsolete.”

The report further noted that fintech firms and crypto-related businesses have been able to develop strongly in Switzerland due to the blockchain-friendly approach of the country. Last month, Swiss President Ueli Maurer said that the government should be “fast and clear” when establishing blockchain regulations, as TheCryptoSight reported on Mar 31.  

Within that same month, the Swiss Federal Assembly adopted a new initiative that will help the Federal Council, Switzerland’s collective head of state and head of government, provide better regulations for cryptocurrencies in the country.