Swissquote, The Rising FinTech Player

Sebastien Callebaut -

In 1990, Marc Bürki and Paolo Buzzi founded Marvel Communications SA, an enterprise that focused on financial software and web applications. Marvel would form the foundation for Swissquote (founded in 1996), an enterprise that promised to be the world’s most pioneering and intuitive online bank.

  • Swissquote was listed on the Swiss Exchange on May 29, 2000, and by 2001, it was the first pure online bank in Switzerland, even winning the Best Swiss Online Broker award
  • Since then, it has grown and and now counts over 450,000 accounts while operating in the Six Swiss Exchange, Bern, Nasdaq, NYSE, German markets, and Euronext, among others
  • Today, the swissquote.ch website is visited over 2 million times every month, ranking it as one of Switzerland’s most prominent financial portal
  • In 2016, the company launched Swissquote GO, a Pokémon GO-inspired financial-based game, the first of its kind in Switzerland
  • That same year, Swissquote became the first company to launch an Apple TV app providing continuous financial news coverage on television
  • To this day, Swissquote remains the first bank to offer five different cryptocurrencies (Bitcoin, Bitcoin Cash, Litecoin, Ripple, and Ether), ultimately providing all customers a safe trading platform
  • In addition, the company also offers the provision for clients to participate in initial coin offerings (ICOs), with the ability to buy tokens through their Swissquote account directly

DIGITAL BANKING

Swissquote offers several products and services in its line-up. However, they all stem from the company’s initial offering: banking. As a result, customers can bank with Swissquote, both online and offline. Moreover, they can enjoy all the privileges of working with such an institution, with access to trading, forex, and robo-advisory.

Trading

With Swissquote, users can trade over 2.5 million products from a single trading account. These include shares, funds, bonds, Options & Futures, and ETFs. In addition, there is also the provision of trading cryptocurrencies, with the currently supported ones including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple.

Clients who have opened trading accounts with Swissquote can also access security analysis tools updated in real-time. They can also get free access to investment ideas with Themes Trading, along with tutorials and webinars to guide their investment decisions.

Forex

Users can access over 130 financial instruments to aid in their forex trading activities. These instruments include but are not limited to currency pairs, precious metals, stock indices, bonds, and commodities. Based on their initial deposits, the company also offers competitive spreads, coupled with a choice of exclusive tools and access to the most popular and independent software.

Robo-Advisory

Clients can delegate with Swissquote’s Robo-Advisory while maintaining complete control of their activities. With the platform, they can easily manage and optimize their diversified securities portfolio 24/7. In addition, they can also enjoy currency hedging, monitoring of personal risk profiles, and the analysis of thousands of securities.

Crypto Staking and Lending

In September, Swissquote announced introducing crypto staking and lending services for the European market. While making the announcement, the company noted that it would soon launch an extensive Single Stock CFD offering to extend its existing brokerage services further. It also announced plans to improve its current offerings by enhancing the features of its proprietary Advanced Trader Platform that leverages Trading View charting capabilities.

STIFF COMPETITION

Swissquote has played a vital role in shaping and influencing the Swiss financial services sector through innovation and focusing on its customers. This has placed it among other key players in this space, with the main ones including Libertex, Degiro, Saxo Bank, Interactive Brokers and eToro.

Libertex

  • Operating since 1997, this is an international financial services group that specializes in online trading and investment
  • Offers over 250 tradable assets, including cryptocurrency
  • It has won over 40 international awards, and with each year, the company has been strengthening its position in existing and new markets with innovative products and services

Degiro

Saxo Bank

  • Saxo Bank is known for building digital platforms that facilitate multi-asset market access, while also offering clients of all sizes with professional-grade tools, industry-leading prices and world-class service
  • Launched one of the first online trading platforms in 1998 and today, it serves over 810,000 clients worldwide
  • Saxo Bank executes 188,000 trades daily and handles over $80 billion in client assets

Interactive Brokers

eToro

USER FRIENDLY AND EASY TO USE

Given that Swissquote is publicly-traded and is regulated in four tier-1 jurisdictions, it is considered a safe broker (low risk), particularly for trading CFDs and forex. On Forexbrokers, the company scores a Trust Score of 99 out of 100, with high scores in the range of offerings and investments, platforms and tools it offers, information it gives to its clients, and the available mobile trading apps.

  • Swissquote is also lauded for its user-friendliness and overall functionality of its platform
  • It is also praised for how easy it is to open an account and get started, along with its excellent customer service that remains unrivaled in the industry

THE MARKET

Swissquote’s primary offering is banking, which places it within the financial services sector, particularly in Switzerland. Its focus on technology to deliver its financial services makes it part of the digital financial services sector which, back in 2018, was valued at just $803.8 billion.

  • It is estimated that by 2026, this sector will be valued at $1.7 trillion, representing a CAGR of 10% over the forecast period (2019-2026)
  • This growth will be attributed to the growing acceptance of mobile payment options worldwide, coupled with the adoption of smartphones

Swissquote prides itself in the empowerment of investors. One way through which it achieves this is by offering an online platform through which they can trade and build their experience as traders. This places it within the online trading platform sector which back in 2019, was valued at $13.1 billion.

  • It is projected that by 2027, this industry will be valued at $18.3 billion, representing a CAGR of 4.2% over the forecast period (2020-2027)
  • This growth will be as a result of the convenience that online trading platforms offer compared to previous methods. Online trading is also less time consuming and has proven to be a great driver for people to invest and trade without the need for a middle person
  • The growth in digitalization globally is also expected to play an integral role in the growth of the global online trading platform market

EXPERIENCED MANAGEMENT

Swissquote is led by Marc Bürki, the Founding partner of Swissquote Group Holding Ltd., and the company's Chief Executive Officer (CEO). Also serves as a Board member at ETH-Rat and previously served as a Telecommunication Specialist at the European Space Agency in the Netherlands, and as a Co-Managing Director at Marvel Communications Ltd. Bürki holds a Master’s Degree in Electrical Engineering from the Swiss Federal Institute of Technology (EPFL) in Lausanne.

Marc Bürki

  • Founding Partner and CEO of Swissquote Group Holding Ltd
  • Also serves as a Board member at ETH-Rat
  • Previously served as a Telecommunication Specialist at the European Space Agency in the Netherlands and as a Co-Managing Director at Marvel Communications Ltd.
  • Holds a Master’s Degree in Electrical Engineering from the Swiss Federal Institute of Technology (EPFL) in Lausanne

Paolo Buzzi

  • Founding partner and Deputy CEO of Swissquote Group Holding Ltd
  • Was previously the co-founder and managing director of Marvel Communications, and a Software Development Engineer at ROLM Systems
  • Holds a Master’s Degree in Engineering and Microtechnology from the Swiss Federal Institute of Technology (EPFL)

Lino Finini

  • The Chief Operating Officer (COO) of Swissquote Group Holding Ltd.
  • Also serves as the company’s Head of Back Office, Banking, Applications, and Custody Bank Director, as well as the Executive Director and Member of the Board
  • Is also a member of the Board of Directors at GHOL
  • Previously worked as a Software and Hardware Architect at Astron Lasercom, and a Software Architect and Account Manager at Lasercom
  • Holds a degree in Computer Science from the Swiss Federal Institute of Technology (EPFL) in Lausanne

TAKE A BREATH

So… This is a lot of information. Let’s summarise:

  1. In 1990, Marc Bürki and Paolo Buzzi founded Marvel Communications SA, an enterprise that focused on financial software and web applications
  2. Marvel would form the foundation for Swissquote (founded in 1996), an enterprise that promised to be the world’s most pioneering and intuitive online bank
  3. Today, the swissquote.ch website is visited over 2 million times every month, ranking it as one of Switzerland’s most prominent financial portal
  4. Swissquote provides its customers with access to trading, forex, and robo-advisory. In more recent years, it has also started offering crypto-currency trading to its clients
  5. Swissquote is led by Marc Bürki, the Founding partner of Swissquote Group Holding Ltd., and the company's Chief Executive Officer
  6. Swissquote recently released its half-year 2021 results, indicating strong growth from the same period in 2020. Operating profit totaled $147.5 million for H1 2021, up from $64 million during the same period in the 2020 financial year

FINANCIAL CHECK

Swissquote recently released its half-year 2021 results, indicating strong growth from the same period in 2020. Most notably, the company attributed its growth to an increase in customer numbers which, in just the first six months of 2021, grew by a little under 50.000 accounts.

  • Net cash from operating activities for the six months ended 30 June 2021 stood at $959.2 million, up from $209.3 million during the same period in 2020
  • Operating profit totaled $147.5 million for H1 2021, up from $64 million during the same period in the 2020 financial year
  • Total assets stood at $9.4 billion for the six months ended 30 June 2021, up from $7.7 billion during the same period in 2020
  • Total liabilities, on the other hand, stood at $8.8 billion for the first half of the 2021 financial year, up from $7.3 billion during the same period in 2020

THE BOTTOM LINE

The Good

  • The bank is expanding fast in Asia and the Middle East as it manages to attract new inflows each quarter all while growing the average deposit per customer
  • Swissquote is innovating at a fast pace as it was one of the first banks to propose crypto-currencies to its customers
  • The bank's high profitability and the relatively high fragmentation in the banking sector could suggest that Swissquote can continue both its organic and inorganic growth strategy going forward

The Bad

  • The bank's expansion in Europe and Switzerland may be relatively limited due to the slow growth and highly competitive environment

THE STAKE

We have a position in Swissquote. Swissquote is a fast-growing digital bank that is gaining traction in Asia and the Middle East as it manages to attract new net customers inflows each quarter. The bank is also consolidating its position in the European market with the acquisition of Internaxx Bank SA in 2018.

  • We will increase if it manages to sustain its operating profit growth in Asia and the Middle East all while steading its position in the European market.
  • We will sell our stake if growth slows down in Asia or if regulation hampers its growth plans.

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Credits

Photo by Nadine Marfurt on Unsplash.