(MENAFN- Swissinfo)
This is quite a startling strategic shift. More than two million people (mainly in Germany) had downloaded the original Numbrs app. It collected clients' financial accounts in one place and offered them products from banks. Now all these apps have been shut down.
Why is that? Changes to European Union laws to create Open Banking should have made it easier for agile fintechs to plug into the financial system and reach customers. Not so, says NumbrsExternal link CEO and chair Fynn Kreuz.
“It should have allowed us to roll out our business by storm. But some banks tried their best to make the lives of third-party providers as complicated as possible and squeeze them out,” he told me.“We came to the conclusion that increasingly complicated regulation around mobile banking and our dependency on banks prevented us, in the long run, from building the quality product that we wanted to build.”
Jumping on bandwagon?
Maybe the writing was on the wall a couple of years back when Numbrs announced big job cutsExternal link after investors declined to put more money into the company. This left founder Martin Saidler to provide most of the funding to transition into a cryptocurrency company.
Even though the company has always been headquartered in Switzerland, the old Numbrs business focused on Germany, and to a lesser extent, Britain. Switzerland was too small a market for a financial aggregator app. Now, Switzerland is everything. Numbrs has moved its headquarters from Zurich to“Crypto Valley” Zug, even though its 70 staff work remotely in numerous locations.
It has fitted out an old Swiss army alpine bunker as a data storage centre (in common with other Swiss crypto storage businesses). It's also standard practice to leverage Switzerland's reputation for private banking, political neutrality and reasonable cryptocurrency regulationsExternal link .
A growing number of companies are moving into cryptocurrencies. German online banking outfit N26 recently told the Financial Times that it is setting up a crypto trading business and regrets not taking the plunge sooner. Swiss cybersecurity firm WISeKey is to open a bitcoin mining operation (using an abandoned Swiss army alpine bunker).
Is Numbrs jumping on the crypto bandwagon to save its own skin? I had to ask. The answer was“no”.
Both Kreuz and Saidler have personally dabbled in bitcoin since 2013 and now believe that decentralised digital money will become“the basis of a new monetary system” that“has the power to change every aspect of our lives.”
Swiss data centre
“Back in 2013 we had the idea of building highly secure storage in Switzerland for our own bitcoin,” said Kreuz. The idea of a personal crypto vault has snowballed into the entire business strategy at Numbrs. Kreuz insists that all investors support the transition, including Saidler who has vacated the CEO and boardroom chair positions in favour of Kreuz.
The Numbrs app is a non-custodial wallet, which means clients keep hold of the private keys that give access to their bitcoin. But the Swiss data centre will act as a back-up, storing encrypted copies of private keys and seed phrases (randomly generated words) that are needed to recover funds.
Unusually, the wallet will charge quarterly or annual fees and will not connect with crypto exchanges or bank accounts. Kreuz says this is to defend the wallet from potential security threats. The vision is that bitcoin devotees will use the app both for storage and to make payments.
The market is getting more crowded by the week. Numbrs, perhaps, has one more chance to convince investors that their bets are good.
Stay tuned to my Twitter feed @matthewallen40External link to get the latest fintech news from Swittzerland.
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