Market concentration is bad for consumers and good for shareholders. The example of UBS shows how wrong such theories can be: although the group combines several major Swiss banks, its market capitalisation has fallen from 113 billion Swiss francs to 86 billion Swiss francs within 25 years.

Swissquote also disproves the theory of the inevitably aggrieved consumer: the online broker was launched in 1996 and was the first to ensure that the prices of securities traded on the Swiss stock exchange were available to all Internet users free of charge. The company became famous overnight.

In May 2000, the company, which had since become a bank, listed its own shares on the Six Swiss Exchange. The stock market value at that time of 350 million Swiss francs has since risen to almost 6 billion Swiss francs. The initial 1,000 customers have grown to 650,000 today. Sales and profits have exploded in the same way. Swissquote is the brainchild of Marc Bürki and Paolo Buzzi. The two grew up on Lake Geneva and studied engineering. Long before the Internet became a matter of course, they recognised its technical potential to enable the general public to carry out financial transactions themselves.

But Swissquote's rise was not a smooth one. Just weeks after the IPO, the dotcom bubble burst. Thousands of small investors were faced with huge losses. Many threw in the towel and forced a number of online brokers to do the same. The Swiss subsidiary of the German Consors also gave up at that time. The young Swissquote inherited many of the clients and was already in the black in 2003.

When the euro debt crisis escalated in 2011, debt-financed foreign exchange transactions also became a big hit among Swissquote customers. It was worth investing borrowed money in the higher-yielding euro, especially as the central bank offered free hedging of the exchange rate risk with the minimum euro exchange rate introduced in 2011. However, in January 2015, the SNB suddenly ended the minimum euro exchange rate. The Swiss franc appreciated abruptly. Many investors suffered high exchange rate losses. As a result, Swissquote barely stayed in the black in 2015.

Two years later, the crypto boom began, which Swissquote heralded, again well ahead of the competition, with the creation of a special trading platform. The crypto boom was given an additional boost by the Covid-related obligation to work from home. In 2023, this bubble also deflated. Crypto pioneer Sam Bankman-Fried turned out to be a billion-dollar fraudster in 2023.

The crypto euphoria was also gone for Swissquote customers for a while. However, the bank lost less revenue than feared. A sign that Swissquote has matured over the years. The fluctuations in Swissquote's income and profit, which depend on individual products, have become smaller over the years. This aspect was also emphasised by CEO Marc Bürki at the annual media conference last week. Bürki emphasised that the recent slump in the crypto market has hardly left any traces at Swissquote. Like his partner Paolo Buzzi, he still holds more than 10% of all Swissquote shares. Bürki is therefore not afraid to make forecasts: he promises that turnover and pre-tax profit will increase by a further 40% to 900 million and 500 million Swiss francs respectively by 2028.

The ambition of the company is that more and more customers will turn their former brokerage account at Swissquote into a primary bank relationship. In addition to their trading features, they have long been offering the minimum package with a salary account and debit card for average customers who don't trade.

The youngest customer segment is also growing rapidly in the joint venture „Yuh“ with the state-owned Postfinance. The financial app launched in 2021 has already reached the profit zone, with 285,000 customers. „If Swissquote had been launched in California, the company would certainly be as big as PayPal by now,“ says Martin Vetterli, the former rector of the École Polytechnique Fédéral de Lausanne, where Bürki and Buzzi studied.

The fact that Swissquote has not come as far as Paypal is not least due to the cramped conditions in the Swiss market. However, Swissquote also owes its success to this small market, which is protected by its own currency, regulation and multiple languages. Industry experts say that it would hardly have been possible to break even as quickly in a more competitive environment. But Swissquote is using this advantage to invest further in technology. Artificial intelligence will soon bring about the next revolution in banking.