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Open Banking – From the UK to Israel

In the UK, Open Banking seems like quite a well-established and common technology used by many of the country’s top banks, yet in Israel, however, it is still an idea for the future. The UK was one of the first countries in the world to open its financial markets to open banking, with 80% of UK customers signed up to banks that are part of the Open Banking programme; this includes the likes of HSBC, Barclays, Lloyds and Santander to name a few.

Open Banking allows customers to move money, make transfers and manage their finances digitally through apps and secure networks rather than the dated model of in-store banking. This is all done through UK banks opening up their data publicly and allowing people to see records such as branch location, banking product information, and spending records of their own accounts. The system has been in place since the beginning of 2018 and has changed the way in which the UK banking operates on both a macro and micro-scale.

Although Israel is one of the world leaders in FinTech, with massive advances being made in online payment platforms, buy-now-pay-later solutions, and the new emerging field of Web 3.0 integration in finance, it’s open banking infrastructure is far behind that of the UK. Regulatory, political, and economic obstacles have been the largest hurdles to it getting off the ground however we are starting to see steps forward in some of the major banks looking to develop it into the mainstream. In November of this year, the Bank of Israel will be traveling to the UK to meet with banks, law firms, regulators, and Open Banking initiative groups to understand more about the mechanics of the system. This is a great step in the right direction for Israel’s central bank as it shows that Open Banking the intrigued and support of a centralized institution to enhance Israel’s banking services.
In addition, the technologies that are needed to regenerate this area are not far from home from Israel’s institutions as many solutions can be found in the country’s vibrant FinTech ecosystem, for example:

Rewire is a licensed remittance company that helps users save on fees and rates when sending money from Israel to one of more than 20 countries. The service, which is accessible from any device connected to the internet, offers savings on currency conversion and transfer costs.

ZenGo is a non-custodial digital currency wallet that removes the need to secure and manage users’ private keys. ZenGo uses a mobile-first software approach with cutting-edge cryptography to secure clients’ crypto assets. The technology puts a strong focus on security as well as the user interface and experience. ZenGo was developed by KZen Networks.

Credics creates and delivers fast, flexible, and cost-efficient transaction management solutions for any payment type. Since 1999, the company has been building a track record for tailored payment processing for various sectors and international clients across a variety of industries. Using over 35 years of hands-on experience, Credics enables businesses to plan and manage all financial activity with balance, finesse, quick time-to-market, and remarkable return on investment. Credics’s solutions can process any transaction using any card type or payment method. A modular, rule-based engine makes the product completely flexible so that it can be easily and efficiently customized for each customer’s needs. Completely compatible with existing systems, Credics’s technologies integrate with processing programs already in place or can serve as a standalone system, performing all stages of payment processing and providing comprehensive, streamlined services. Credics’s rule-based engine provides customized solutions for payment processors, card issuers, acquirers, insurance companies, banks, retailers, and more.

Crowded is a groundbreaking banking and financial management service designed specifically for member-based nonprofit clubs, groups, and their members. The company’s app is tailored for the segment that exists between B2B and B2C and which has been underserved by traditional banks. By providing payment solutions, banking tools, reporting features, tax tools, and organizational management software all in one package, Crowded aims to revolutionize how 501(c) organizations manage their money.

Duality Technologies develops technologies for privacy-preserving data collaborations. Duality SecurePlus combines advanced homomorphic encryption and data science, enabling organizations to derive insights without exposing sensitive data. Duality was listed on Fast Company’s 2020 Most Innovative Companies List in the Data Science category. Duality has also been recognized as a Gartner “Cool Vendor” for Privacy Preservation in Analytics and was named runner-up in the RSAC Sandbox competition.

Open Finance supplies a full platform of financial technology tools for small and medium-sized businesses, financial technology firms, and enterprise financial institutions. The company’s easy-to-use yet rich APIs and SDKs enable users to get the most out of their customer’s financial data.
Rather than Israel being the inspiration for the UK, maybe Israel will be following Britain’s lead in helping to revolutionise their banking system.

For further information on UK Open Banking feel free to get in touch with Cameron Crowley (cameron.crowley@israeltrade.gov.il) and for any further inquiries on Israeli innovation, please contact your local Commercial Office.