Israeli financial technology is set to make its way Down Under, after the Economy Ministry’s Chief Scientist Avi Hasson signed an agreement with the Commonwealth Bank of Australia to develop joint research and development projects.
The bank, said Hasson, is the biggest Australian company to strike a deal with Israel for technology.
The bank is the first Australian firm to join the Economy Ministry’s Multinational Corporations (MNC) program, which works with dozens of international tech and non-tech giants to develop new products and technologies in Israel for use around the world. Under the agreement with the bank, the Chief Scientist’s Office will scout for Israeli technologies meeting the bank’s needs and provide financial support for completing necessary R&D.
Under the deal, the bank will also support the joint project with matching funds, either via investment or by lending equipment, providing technological and regulatory consultation, marketing directions, etc. Thus, said Hasson, the Bank will help Israeli fintech firms grow, while benefiting from innovation developed in Israel.
The deal is part of an overall Israeli program to develop stronger R&D ties with countries around the world. It “testifies to the program’s global nature and its benefits even for companies from distant countries, especially those that do not yet have a permanent presence in Israel,” said Hasson. “In addition, this is the first bank joining the framework.
One thing the deal shows is that Israel’s reputation as a place to do business has not been marred by the experience of an even larger Australian firm, Woodside Petroleum, which decided to pull out of a deal to purchase 30 percent of the Leviathan gas field for some $2.5 billion dollars. The company made the decision, it said, after the Israeli government proposed changes to the contract Woodside was set to sign that would have raised the fees it was to pay.
Commonwealth Bank, Hasson said, was looking to the future, not the past, and was interested in a number of Israeli technologies.
“The Australians were impressed with the program’s value and its potential contribution to banks and the financial industry in general,” he said. “The interest shown by the bank in Israel’s innovation industry is focused mainly on cyber-security companies.”
Commonwealth Bank is a multinational Australian bank with branches in New Zealand, Fiji, across Asia, the US and Britain. The bank was founded in 1911 by the Australian government and was fully privatized in 1996. In September, 2014 the bank was valued at $115.4 billion and its profits reached $7.7 billion, making it Australia’s largest.
The bank is in good company; international financial institutions and organizations, from Citi to Barclay to MasterCard have R&D and other tech operations in Israel. Just last month, Barclays, the famed UK bank, teamed with US accelerator Techstars to develop innovative financial technology solutions with Israeli start-ups. According to Greg Rogers, executive director, Techstars Barclays Global Partnership, “Tel Aviv has become one of the premier places in the world for financial technology, so we decided to open a branch here.”
Agreeing with Rogers is Garry Lyons, MasterCard’s chief innovation officer. “I continue to be impressed by the level of innovation in Israel and quality of its entrepreneurs,” Lyons said. “Israel is a fantastic place, especially for things like security technology and payment technology — both things that naturally interest a company like ours.”