I want to share some insights, trends, and takeaways after attending the Fintech Aviv conference, and Jerusalem Fintech Meetup group this week.
For those uninitiated to FinTech – it is short for Financial Technology and covers Banking, Payments, Credit, Insurance, business efficiency and More
So, what are the major trends here? The payment landscape with contactless payment is going to be an industry changer, Open Banking which allows the customer to share their bank data with other providers and use it for analytical purposes, Blockchain will continue to make inroads as a back end solution and of course Regulation and the protection of both data and the consumer. We are seeing the increase in the use of Biometrics (Face recognition) playing more of a role.
One of the more interesting participants at the conference and the meetup was the Bank of Israel who is driving the change to open Banking in Israel, and adopting the European Standard. Open Banking is a game-changer and will offer people more transparency. The Banks and Credit Card Companies will need to adopt these standards and deadlines are in place for this by 2021.
There is an issue to whom the data belongs, i.e. The Consumer and safety guards will like GDPR – the EU’s General Data Protection Regulation will need to continue to be implemented.
Open Banking is only the first step. Bank Data is only the first step. This has expanded to Insurance, Energy, Telecoms and more.
Open Banking will lower the barriers of entry. The Bank of Israel has already started this process, this should and will help consumers SME’s to get better access to credit, help Retailers get new methods of payments and reduce costs.
The challenge will be to interpret the data, and Ai will be an important part of this. In my opinion, Personal and Business Accounting should be seamless and automated and create intelligent information.
So, is this is a good thing? Over the last few months, I learned a new word – Good Tech. i.e. using Technology for good.
In one of the more interesting discussions, the subject of consumer credit and the role of credit card companies. At the conference it was announced that Visa did a deal with Israeli influenced Company – Charge After /https://chargeafter.com/ who are offering the first global network to provide a complete solution for Point-of-Sale Financing from multiple lenders.
Why Visa could not do this themselves is beyond me, but there is a major issue to consider here. The average Interest (APR) on Credit Card Financing is currently above 15% a year. In a bit of banter, I made the following comments at the conference – This is “daylight theft” and “the system is broken”. Why should somebody who has never defaulted pay more than 4-5%? On the flip side, there is a risk of default and this runs at approx. 10% or more in the US. On further reflection, Companies like Charge After and Crossriver Bank are trying to bring in better use of Data and Ai to offer lower credit costs based on customer history and credit scoring. The adoption of open Banking and through the notion of Good Tech should hopefully reduce the cost of borrowing for both Consumers and SME’s. It is time to give back power to the consumer, the average Joe who is continued to be taken advantage of by Big Business, Big Government and the system.
So, what is the solution (at least in my worldview), from Jerusalem, will go forth Torah and Wisdom, innovation to make the world a better place.
While I was at the Jerusalem Event, Nicky Newfield of www.arcimpact.org posted on LinkedIn after attending an event “I am proud to live in #Jerusalem where the Mayor believes in building a tech community and supports entrepreneurs building an ecosystem around them. Thank you ‘Made in JLM ‘ for doing an amazing job of stimulating the tech ecosystem and contributing to economic development. Moshe Leon called a meeting this evening with the Jerusalem Foundation and Made in JLM to listen to entrepreneurs who manage online tech communities like Facebook, WeWork, QueenB, SheCodes , Fintech community , EdTech community , Haredi women in Tech , Jerusalem Model, online gaming communities , AI community , UI/UX community , East Jerusalem Jest hub, and many more to understand what resources the city can help within order to foster these communities and further help develop the Tech infrastructure. Each of the 20 people in the room manages a network of between 30 people to 30000 . I really am impressed Moshe Leon listens to each person and that he is proud of people who are doing good work in his city and he believes in them. I personally believe that part of #israel success is the networking and building a supportive infrastructure that is tangible amongst entrepreneurs, professionals, corporates , municipalities, philanthropists, accelerators, incubators and investors. #community”
I just want to end off with 2 examples highlighting this.
Crossriver is a US community Bank and leading Fintech player and is proud of its Jerusalem connection and growing IT Center in Jerusalem. https://www.crossriver.com and Our Crowd – whose annual summit is being held tomorrow in Jerusalem. In a press release, OurCrowd announced to Boost Investment in Seed, Early-Stage Startups. This will be the subject of my next blog.
So, why I am sharing this with you. I am not a just a passive armchair watcher, but a hands-on veteran (survivor) of Israel Hitech back in the .com days of about 20 years ago, when I was the CFO and small part founder of STI Ventures, a Venture Fund whose Portfolio invested in a number of high flying Investments and Investors. Not sure, I would publish all the names today including one Investor that is still in the hot seat – Softbank. For those who want to have a look at the past Hitech Hype, have a look at the attached link. https://en.globes.co.il/en/article-455041 .
Fast forward to the Future i.e, Today and I want to share my experience not only in Start-ups but also as CFO of leading International Fintech and Investment Companies and help Start-ups and SME’s become a success, With this in mind, I am offering Entrepreneurs and established Companies, a Start-up Toolkit. I have teamed up with leading Professionals, Experts in their field, and Funders to provide the essential components that Start-ups and established Companies to re-assess their needs:
– Inspiration, Innovation, ideas
– Product Validation
– Business & Financial Plan /Accounting Services
– Access to Money