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Neobank Relio receives FINMA fintech license

Wednesday 29 March 2023 15:18 CET | News

Switzerland-based neobank Relio has received a fintech license from the Swiss Financial Market Supervisory Authority (FINMA) and must now wait for the approval of the supervisory authority to go live.

Relio relies on vertical banking and focuses on SMEs and start-ups. Opening an account for SMEs that do not fit into the standard compliance procedure often takes a long time. Once the account is finally opened, changing cash flows, payments from new countries, or other factors can lead to the temporary blocking of accounts at classic banks, and in the worst case to the expulsion of the SME.

Switzerland-based neobank Relio has received a fintech license from the Swiss Financial Market Supervisory Authority (FINMA) and must now wait for the approval of the supervisory authority to go live.


Relio has supported its business model with an algorithm that largely automates and processes compliance. The neobank aims to allow complex SMEs to get their accounts opened faster than classic banks could. This process should take up to 24 hours for SMEs with little complexity, approximately 2 days for those that are quite complex, and a maximum of a few days for very complex SMEs. Even after the account has been opened, irregularities or deviations from the norm in day-to-day business should not lead to account closures. Relio aims to act quickly and efficiently beyond the algorithms procedures, for example with manual checks and clarifications.

Relio’s market entry

While the fintech license is in-house, it will still be a few weeks before market entry. After the license has been issued, FINMA still has to issue official permission to go live. Additionally, the final steps for the technical setup are still in progress at Relio, for example, the connection to the Swiss Interbank Clearing (SIC) is still being worked on. Furthermore, the neobank is in the process of establishing the required regulatory team.

Pre-registrations from potential customers have been possible for some time. According to a Relio representative, quoted in an interview with MoneToday, since the media reports about Credit Suisse came out, Relio noticed a significant increase in pre-registrations without the neobank having intensified any marketing measures. As stated by the representative, two to three times as many pre-registrations mean that automated compliance and safe custody of deposits at the Swiss National Bank can become a strong argument. 

What the fintech license mean

The fintech permit aims to support innovation and promote financial companies with strong ideas. Compared to a full banking license, the approval procedures are easier to complete and the capital requirements are significantly lower. The public deposits are limited to up to CHF 100 million for each fintech. In addition, the funds may neither be invested nor earn interest. Instead, they are deposited with the Swiss National Bank so that they can be paid out to customers again if a fintech gets into financial difficulties. The fintech license thus creates potential for companies and innovations without exposing customers to high risk.

 


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Keywords: banking license, fintech, product launch, expansion, banking
Categories: Banking & Fintech
Companies: Relio
Countries: Switzerland
This article is part of category

Banking & Fintech

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Relio

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