The Securities Authority, headed by Ms. Anat Guetta, and the Innovation Authority, headed by the CEO, Mr. Dror Bin, will invest about two and a half million shekels in fintech startups as part of another cycle in the pilot track of the Data Sandbox program. The program is designed to promote the activities of fintech companies in Israel, as part of the implementation of the strategy led by the Securities Authority for the development of an innovative, competitive and attractive capital market for the benefit of the financial consumer.
Two of the pilots that were recently accepted into the program deal with realizing the potential of open banking, comparing the costs of financial products, in a way that the optimal loan for him (mortgage or consumer loan) is adapted to the client and at the same time he receives principled offers online from several appointing parties. The third pilot may mark the beginning of the way to the discharge of financial services in the BaaS (Banking as a Service) model in a way that will allow fintech companies to offer their customers only certain financial services that fit and complement their basket of services.
The Securities Authority has been working in recent years to encourage fintechs to enter the Israeli market in a variety of ways, with one of the Authority’s flagship programs for the fourth year being the pilot program. The program gives Israeli startups in the financial fields the opportunity to develop their product for commercialization and penetration into the market – first through financial support (in the form of financial grants), but more importantly – the program connects fintechs and capital market bodies (starting with the Securities Authority itself, through the stock exchange, funds, banks and the investment houses) and builds platforms for experimentation – beta site – with which fintechs can experiment with real interfaces with entities that will implement the systems and technologies they develop.
In light of the success of the program so far, the Securities Authority and the Innovation Authority are inviting Israeli technology companies to submit applications for assistance in conducting fintech pilots in Israel and abroad, as part of the new Data Sandbox pilot track. You can submit an application to join the program until January 31, 2023. for full details.
Below are the two main challenges that are at the core of the new track:
1. Integration of solutions of Israeli technology companies in the traditional financial system, in particular in the field of payments, for the benefit of consumers, including digital onboarding for the customer through virtual accounts, which integrate eKYC solutions for the purpose of customer identification, including the direct connection of fintech companies to supervised payment systems in Israel, such as: this system” B (credits and transfers in real time), MSB (Bank Clearing Center Ltd.) and SBA (Automated Bank Services Ltd.).
2. Expanding the public’s access to financial information, services and innovative products in the field, through open software interfaces with financial entities (Open APIs) and in particular comparing costs from a large number of factors, as possible, in a way that will improve the situation of the consumer, with an emphasis on dedicated solutions for the ultra-orthodox and Arab society.
Below are the three companies that were selected for the new round of the program:
The first company is “Family Biz Holdings Ltd.” The fintech company that developed a platform for holistic financial management. As part of the pilot program, FamilyBiz will provide a learning recommendation system, which will adapt credit products to the customer’s needs while taking into account his abilities, ambitions and risk level, thus creating a synergistic ecosystem between the credit providers and the end customers. After adjusting the credit product, the customer will receive online binding financing offers from a number of financing parties participating in the pilot.
The second company is Volti Technologies Ltd. Walty is a fintech company in the Mortgage Robo-Advisory domain based on AI technology. As part of the pilot, digitization of the mortgage taking process will be possible and the company aims to completely change the way customers take out a mortgage in Israel.
The third company is “Ofek Cooperative Credit Society Ltd.” Ofek is a Credit Union owned by over 13,000 Israelis working to revolutionize the banking market. Ofek wishes to enable access of banking as a service (BaaS) to fintech companies in order to improve and expand their services to the public, and within the pilot wishes to promote a pilot in the field of deposits.
The pilot track is part of a unique collaboration between the Securities Authority and the Innovation Authority and accompanied by the Bank of Israel, which was carried out with the support and backing of the Ministry of Finance.
Anat Guetta, Chairman of the Securities Authority: “The Data Sandbox program creates unprecedented opportunities for fintech companies that develop technologies that may develop, refine and drive the Israeli capital market. The program offers real-time experiences on technological platforms that interface with the systems of the capital market bodies (Beta-Sites), and allow companies to demonstrate their products in an optimal way, along with professional support and financing. The Securities Authority believes that the development, integration and assimilation of modern technologies generate value for the Israeli consumer in a form that will include the capital market, adding competitors and players, thus increasing competition. This, as part of the implementation of the strategy led by the Securities Authority for the development of an innovative, competitive and attractive capital market for the benefit of the public.”
Dror Bin, CEO of the Innovation Authority: “Fintech is shaping the financial industry thanks to the combination of advanced technologies such as artificial intelligence and blockchain. The fintech companies selected as part of the pilots, help both citizens to conduct more accurate and accessible negotiations – such as the “Volti” company and the “Family Biz” company, and to improve processes and make them automatic in the companies – the “Ofek Agudat Credit Cooperative Ltd” company. These technologies will help increase competition in the financial services industry and are expected to lower costs for private and business customers. The size of the global fintech market was estimated at $110.59 billion in 2020 and is expected to grow at an average annual growth rate of 20.5% up to $699.50 billion by 2030. The Innovation Authority believes that the cooperation with the Securities Authority provides Israeli companies with a “sandbox” in which they improve their products and services in order to be more prepared for the competitive world market and also allows for the construction of a regulatory infrastructure for the adoption of advanced financial technologies in Israel for the general public and Israeli businesses.”
You can Submit applications For an unlimited grant to run a pilot until January 31, 2023 at 12:00