Israeli regulator: Banks block fintech competition

Michal Halperin  / Photo: Rami Zaranger
Michal Halperin / Photo: Rami Zaranger

The Israel Competition Authority has published a report claiming that the banks see fintech companies as rivals and are blocking their entry into the Israeli market.

"The banks set many demands that weigh on fintech companies regarding opening bank accounts and their routine management," the Israel Competition Authority has said. "Some of the demands set by the banks are impossible to apply, delaying and even preventing the entry of fintech companies into operations in Israel and competing with the banks."

The Israel Competition Authority also criticized the Israel Capital Market, Insurance and Savings Authority, which it claims has given a relatively small number of licenses to startups focusing on financial services so that they can operate in Israel.

These claims were made today in a report to the public issued by the Israel Competition Authority (formerly the Israel Antitrust Authority), headed by Michal Halperin.

The report stressed, "In our investigation we did not find any indications that the banks have formed policies and procedures with the aim of making it difficult for rivals." But the report then continued to cite unreasonable and impossible to apply demands that effectively blocked the entry of fintech companies into the Israeli market.

The report states, "The investigation by the Authority found that the banks see the fintech companies as a competitive threat in some areas of activity. Although we are talking about small companies, some of the banks see them as rivals in various profitable areas."

The Israel Competition Authority says that the report was written after a dialogue with other regulators but the letters attached to the report's appendix from other regulators shows that the dialogue was far from productive.

Supervisor of Banks Yair Avidan writes that although he sees fintech companies as an "opportunity" and even "agrees with the statement that there a number of challenges before the fintech companies which delay the ability of these companies to develop in Israel," he really does not agree with the conclusions that the Israel Competition Authority has drawn. "We reject the conclusion that some of the typical practices of the banking system make it difficult for their business operations. We are not talking about practices but the absence of regulation and supervision designed for these companies."

The Supervisor of the Capital Market, Insurance and Savings Authority Moshe Bareket, who is criticized for not issuing enough licenses to fintech companies described the report as a mistaken narrative and that it is the Israel Competition Authority itself which is preventing competition.

Dr. Shlomit Wagman, director general of the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) also weighed in with criticism of the report. "A significant issue of substantial influence in removing obstacles in the banking system for fintech companies and their activities is the absence of effective supervision and is a risk in the regime for prohibiting money laundering and financing terror in Israel."

However, Israel Securities Authority head Anat Gueta welcomed the report.

Published by Globes, Israel business news - en.globes.co.il - on September 22, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Michal Halperin  / Photo: Rami Zaranger
Michal Halperin / Photo: Rami Zaranger
Orit Strook  credit: Marc Israel Sellem/The Jerusalem Post Finance C'ttee approves NIS 300m coalition funds distribution

The money will mainly go to Religious Zionist party minister Orit Strook's Ministry of Settlements and National Missions.

Dangoor Academy  credit: British Embassy in Tel Aviv British Embassy showcases Israeli healthcare startups

The nine startups participated in the Dangoor HealthTech Academy, a program that connects Israeli startups with the UK healthcare system.

NextVision Stabilized Systems  credit: Shlomi Yosef/Tali Bogdanovsky Next Vision shareholders make NIS 230m exit

A British hedge fund has bought a 2.5% stake in the stabilized cameras company.

Energean CEO Mathios Rigas at the Israel Business Conference   credit: Shlomi Yosef Energean's $1b gas fields sale at risk

The sale of the energy company's asset portfolio in Egypt, Italy and Croatia may fall through because of the buyer's difficulties with the Italian regulator.

Kela Technologies founders Jason Manne, Hamutal Meridor, Alon Dror and Omer Bar Ilan  credit:  Yosef Haim Alterman Defense tech co Kela raises $39m

In response to the events of October 7, Kela has developed a platform for rapid integration of commercial technologies into military systems.

Benjamin Netanyahu  credit: ‎Alex Kolomoisky, Yediot Aharonot Firing the Shin Bet chief: The hurdles

Prime Minister Benjamin Netanyahu says he has "lost trust" in Shin Bet head Ronen Bar. Will this be enough to overcome legal challenges to his dismissal?

Emiliano Calemzuk  credit: PR CEO and "investor group" buying out Reshet 13

CEO Emiliano Calemzuk and the other investors will hold 74% of the television channel, while Len Blavatnik’s Access Industries and WBD will remain with 26%.

Inflation  credit: Tali Bogdanovsky Unexpectedly low February CPI reading cuts inflation

While inflation in Israel in the 12 months to the end of February 2025 is lower than forecast, housing prices continue to rise.

Yitzhak Tshuva credit: Gidon Levy and Tali Bogdanovsky Competition Authority allows Delek takeover of Isracard

The Competition Authority is considered the easier of the two regulatory hurdles that the deal must overcome, the other being the Supervisor of Banks.

David Amsalem  credit  Noam Moskowitz, Knesset Spokesperson's Office Rafael to pay state NIS 444m dividend

The minister in charge of the Government Companies Authority, David Amsalem, has approved the payment by the defense company.

Barak MX air defense system  credit: IAI IAI profit jumps 55%

Israel Aerospace Industries posted a net profit of $493 million for 2024, and ended the year with an all-time high orders backlog of $25 billion.

A TSG system in tactical use  credit: PR TSG signs cooperation agreement with US defense co

The agreement includes the integration of TSG's advanced technologies into sensor-based defense systems, which will be integrated into the operational systems of US defense units.

Bria CEO Yair Adato credit: Kseniia Poliak Israeli visual generative AI co Bria raises $40m

Bria’s Visual Generative AI platform empowers businesses to create predictable, controllable, and on-brand content that aligns with their visual language.

Amnon Shashua and Aviram Ziv credit: Eyal Izhar OrCam stymied by investor dispute with Shashua

Demands by institutional investors are blocking the visual and hearing impairment device developer's recovery plan.

Work on the Green Line credit: Bar Lavi Egged wins tender to operate TA light rail Purple, Green Lines

NTA awarded the tender to Egged, which already operates the Red Line, despite government ministry opposition to one operator for the entire network.

Gabi Seroussi illustration: Gil Gibli Board chooses Seroussi as IAI chair as Erdan freezes candidacy

Israel Aerospace Industries board chose Gabi Seroussi as chair even though he did not to go through the preliminary process of the Government Companies Authority appointments review committee.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018