A little over ten years ago, very few banking transactions could be completed without going to the bank. Financial services were shrouded in mystery. People had, for many years, subscribed to the notion that they should leave the intricacies of their finances firmly in the hands of the banks.
The apocalyptic events that followed the financial crisis in 2008 changed the face of banking. People were distrustful of financial institutions following the public release of the series of catastrophic decisions and mistakes that led to the collapse.
The surviving banks could see the writing on the wall. It was time to overhaul the way banks functioned and how customers accessed them. Clients wanted competitive prices and services and transparency from their banks. Innovative financial institutions realized that using technology to their advantage could be the answer. The concept of FinTech was born.
Banks were developing interactive websites where customers could choose to login and do various transactions and Israel was a leading nation in this initiative. Startups in the FinTech field have flourished. They offer information protection services to allow clients peace of mind. Trading networks make it easier than ever to enter the stock market and make a profit.
One of the most important features of FinTech is the virtual data room. It is an online storage space that allows clients, banks, and partners to access relevant information. The virtual data room ensures that payments and transfers can be done by bringing the parties engaged in the transaction together in a secure space.
In Israel, FinTech is a burgeoning market. Known as the startup capital, Israel has produced several new companies working in FinTech. Israeli success in the field is unprecedented.
Among Israel’s FinTech success stories are startups working in fields such as cryptocurrency, personal financial planning, protection of data, fraud prevention, and customer services. Many organizations have gone public, and there is a lot of interest from local and foreign investors.
What is it about Israel that has brought it to the forefront of FinTech advancement?
- Focus on technology
Israelis as a society are very engaged with technology such as mobile phones, which makes them open to trying new apps and programs.
Technology is embraced in everyday life and is regarded as essential by the country’s education system. Israeli developers have mastered the ability to take algorithms designed for other sectors like gaming and adapt them to FinTech requirements.
- The importance of entrepreneurship
There is a lot of focus in Israel on entrepreneurship training and funding, which makes the environment startup-friendly.
The country boasts many successful FinTech organizations, and there is a great deal of knowledge on the subject available to newcomers. Many existing FinTech companies are investing in new startups that have the potential to take the finance world by storm.
- A receptive environment
Israel’s banking system has long been a proponent of innovation. New ideas and concepts have been tested in the Israeli market with much success. The country’s financial regulations make it the perfect place to create and test new FinTech products.
Many Israeli citizens work in the finance industry overseas in countries like the United States. Their knowledge in the field is an advantage when they return to Israel to start their own companies.
- Global interest
Most of the world’s big banks are investing in Israel. It allows them access to the technology they need for successful FinTech products. Banks are always on the lookout for startups that have the potential for success to invest in them for their mutual benefit.