You can derive a fast acting switch from a magnet and coil sensor etc. But you'd need electronics to do it.
A VR sensor (or hall effect) on a toothed wheel is a common way of deriving the timing signal on a modern car. The VR sensor produces an approx sine wave and the electronics trigger on the crossing point.
The last simple engine I had was in a Vespa. That had a flywheel on a taper, and a magneto type ignition (no battery needed) but had points, also driven off a cam on the flywheel mounting boss.