How can fintech innovation thrive in Switzerland? A startup founder has some answers


The Zurich-based fintech Yokoy is one of the rising scaleups in Switzerland. It has won several prizes and awards and has been expanding to other countries since its founding in 2019. But what kind of ecosystem is needed for a startup, or a scaleup, like Yokoy to thrive? We asked Phil Sahli, CEO of Yokoy, to find out more.


For those who don’t know Yokoy, can you quickly describe it?

Yokoy is a spending-management solution. We combine expense management, invoice processing, and card payments all on one platform, and we automate it through applied artificial intelligence. So we reduce all the manual work that would be needed to process expenses and invoices, saving time and saving a lot of money for our customers.


What kind of ecosystem is needed for a scaleup to thrive the way Yokoy has?

I believe that there is no given ecosystem, especially not for a young company. I truly believe that you need to create your own ecosystem. That means you start looking for the right partners, and you start working with them to see what works. Then you start creating your ecosystem. It will also change as you grow—some partners from the beginning might not fit anymore after a couple of years. That’s how we created the ecosystem with SIX, with UBS as our credit card partner in Switzerland, and so on. Those partnerships establish over time, because you also need to establish trust with them and have the first success cases. That’s basically how a partnership and an ecosystem gets stronger.


When it comes to fintech innovation, how does Switzerland compare to other financial centres?

It always depends on how you measure it. If you measure it in terms of numbers of fintech unicorns, then we probably don’t rank at the very top. But on the other hand, we’re a much smaller country. What’s important for me, if you look at the economy as a whole, you basically look at GDP, you look at inflation, unemployment rates—and there we rank very well. We’re doing very well compared to other countries. That means that you’ve done something right. And one part is probably the entire university and education system, which is often the place where innovation kind of starts and where innovation also gets funded. A lot of startups come out of universities. We’re also a partner with the University of St. Gallen and so forth, so those places do get a lot of attention [and] funding in Switzerland. I believe this is absolutely the right way. It’s not yet the case that we have a huge number of success stories of young companies coming out and really building those huge empires and going public. But I do believe we’re doing the right thing. We’re investing in the right place, and we will harvest later on. We will see the progress. That’s why I’m very confident.


What is the relationship between fintechs and traditional institutions? How do traditional financial institutions collaborate with new players
in the financial centre?

Traditional institutions have the benefit of trust, reputation. And for a young player, you have pretty much none of that yet. You have to build that up. What you have, though, is agility—you’re fast, you can develop, you can use the newest technology that is out there, while the more established institutions don’t have that. They’re built on aged code and so on. So there is an interest from both sides. They want to make sure that they can tap into that young speedboat, and as a young company you want to make sure that you’re seen as a trusted player in the market. And there always needs to be a win-win [situation]. If you find the right partner where you can have a common product or a common customer segment, then you will find that win-win. Obviously, the established player still needs to trust you. It’s a trust game. But when you find that, then it’s basically set up for success. And that’s what we need. We certainly need more of those combinations, but they’re not easy. And it’s also OK if it sometimes doesn’t work out. You try, you talk to each other, you brainstorm on ideas. Sometimes it works, sometimes it doesn’t—and that’s fine. And we should try much more. We should probably even do that from a very early stage. We did it after a couple of years, but you could start doing that when you’re still at university when you’re really starting out with your first couple of customers and when you start building a startup.


SIX also invested in Yokoy. What is their goal besides a return on investment?

I hope it’s also to actually fund and get the Swiss fintech ecosystem established. And I truly believe it is. I truly like the people at SIX—they are very good people. They invested in us very early, and going in early is always a huge bet. You basically invest in people in the beginning. Because a company in the very beginning doesn’t have much. It doesn’t even have a fancy office. It has a couple of people and maybe one or two customers and that’s it. So you truly invest in people, and that’s where it probably goes back to the education sector: You want to make sure that you invest in something that you will harvest later on. And money, return on investment, is certainly one part. But it’s also employment, it’s even tax for the government. It’s basically the economy that you want to strengthen as part of the system. And SIX, with its ambition, is probably the best example for that.