Global banks, Intel join Israel’s fintech scene
HSBC, RBS, Italy’s Intesa Sanpaolo and Banco Santander are partners in a new fintech hub in Tel Aviv
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Four global banking conglomerates have joined forces with semiconductor giant Intel and three Israeli entrepreneurs to take part in Israel’s growing financial technology scene by setting up a new fintech hub at the heart of Tel Aviv.
HSBC, RBS, Italy’s Intesa Sanpaolo and Spain’s Banco Santander have set up, together with Avi Cohen, Gil Devora and Moises Cohen, a new center to foster the creation of financial technology startups in Israel.
The Floor, as the Tel Aviv based center is called, aims to pave the way for the companies it fosters to access the $1 billion investment funds managed by the group’s strategic partners and banks. KPMG and Accenture are also part of the venture, the partners said in a joint statement.
Located at the Tel Aviv Stock Exchange, the hub will provide office space and mentoring services to ventures in the financial technology sectors, whether they are developing products for digital banking, blockchain solutions, digital payments or anti-fraud software.
The center aims to facilitate access to investors, financial institutions and Asian markets and help these initiatives develop. China’s Pando Group, a $250 million Chinese backed venture capital fund, is a backer of the initiative, The Floor’s website says.
“Together with our partners and our fintech companies, we will begin to pave a new path that helps create exceptional commercial partnerships alongside strategic investments,” Avi Cohen, CEO and co-founder of The Floor said at the inauguration of the center last week.
Israel’s financial technology scene is still in its infancy but has witnessed sharp growth in the past two years, a report by data firm Meidata for Bank Leumi Le-Israel Ltd. shows.
More than half of the 200 companies operating in the field today employ fewer than 10 workers, and most of them have been set up in the past two years. These companies work in a variety of areas, developing products that range from improving ways to give loans to capital management solutions and the virtual transfer of money.
Globally, overall investment in fintech companies surged to $19 billion compared with $12 billion in 2014 and just $2.4 billion in 2011, according to data compiled by New York data firm CB Insights.
The Floor’s activity will add on to that of other foreign banks operating via accelerators in the sector in Israel, including Citi and Barclays Bank Plc.
“HSBC is an active supporter of innovation — fostering fintech companies through innovation labs in Europe and Asia,” Rémi Bourrette, head of strategic innovation investments at HSBC said at the event. “We are looking at innovation hotspots around the world, and as such are very excited to be involved with the Israeli fintech scene.”
Partnering with The Floor will provide HBSC with access to the latest technologies, as part of the bank’s push to search for innovation, and the opportunity to invest in these companies and allow them to grow and perhaps also use the technologies developed, he said.
Hedva Ber, the supervisor of banks at the Bank of Israel, said the central bank has taken a strategic decision to support innovation in the banking system and to promote cooperation between banks and the fintech industry. Such a cooperation can be a “win-win situation” for all sides. Innovation will improve efficiency of the banks, increase competition in the financial market and upgrade the quality of banking products offered to consumers, she said.
