A new study shows that the fintech sector in Switzerland continues to grow, while traditional financial institutions are stagnating. The report was published by SwissBanking on April 1.

The report dubbed “IFZ FinTech Study 2019” was prepared by the Lucerne University of Applied Studies with an aim to show developments in the fintech industry in 2018 and analyze how banks position themselves vis-avis the fintech industry.

Per the report, the Swiss fintech sector showed significant growth in 2018. With 356 active companies by the end of the year, the industry reportedly grew by 62 percent. The sector reportedly registered larger venture capital transactions, although the market for cryptographic assets was subject to a significant correction.

The report further notes that the fintech industry is continuously developing compared to the general financial sector, where the number of organizations and employees have been reporting a decline. Per the report, fintech companies are faster and more efficient in terms of implementation and deployment of new technologies.

When it comes to traditional financial institutions, banks purportedly have to evolve in order to stay relevant. 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 also noted that distributed ledger technology firms and crypto-related businesses were able to grow thanks to a friendly regulatory environment in the country.

In late March, Swiss President Ueli Maurer, stressed that establishing regulation for the blockchain sector should be fast and clear. Speaking about blockchain and other distributed ledger technologies, Maurer said that Swiss authorities are “constantly looking for ways to stay two steps ahead."

That same month, the Swiss legislature— the Federal Assembly — approved a motion to instruct the Federal Council to adapt existing legislation for crypto regulation. The legislation is set to determine how to stifle cryptocurrency-associated risks, as well as whether entities operating crypto trading platforms should be equated with financial intermediaries, and thus be subject to financial market supervision.