"Covid-19 has very much accelerated the use of digital means of communication. With people unable to travel and see for themselves personally, they are forced to adopt tools like Zoom and other chat platforms. This may not seem terribly radical, but for business relationships, it's significant," Dan Zinkin, Technology MD at JP Morgan Chase Digital Investment Banking and Head of the JP Morgan Israel Technology Center told the Enterprise Technology Summit held by "Globes" and JP Morgan at which Israel's ten most promising startups for 2020 were ranked.
"Historically, investment banking has been characterized by relationships that you built with customers, through the time that you invest in them and through personal influence in conversations when they are sitting opposite you. When you work in the office you waste a lot of time on PowerPoint and Excel.
"At JP Morgan we had already undergone digitalization in 2018 in order to adopt news ways and adapt existing procedure, such as mergers and acquisitions, capital raising and offerings, to the digital world, so that much of this journey has been shortened. Adopting these tools represents more of a cultural change than a technological revolution."
How do you see what is happening with cryptocurrencies as a bank and tech professional? Can it be called a revolution?
"We are at a stage in which you try to understand which tools you need to give to your customers, and which tools you need to give to your bankers. But I don't think we are talking about a radical transformation compared with currencies or financial instruments in previous generations. It represents more of a change for the CEOs and boards of directors of the word's major companies, and the banks supporting them."
How can you encourage the use of digital tools for substantial needs such as conducting very large transactions or remote capital raising?
"In recent months there has been a flood of mergers and acquisitions and large public offerings, and the vast majority of all this was performed solely on the Internet. Taking into account the chemistry that is usually required to conduct a transaction, in the network of relationships and the meetings with investors in a road show, it will be very interesting to see if the world will return to the days in which the CEO went absent from the company for two weeks and went out on the road to meet investors around the world.
"After all, they spend half of their time traveling, when they could be meeting more investors in more countries digitally. We are also talking about less expenditure on getting the business moving. I think that we will see much more of this in the future. We saw this happen this year and it was very successful. We are investing a lot in this area and working with other fintech companies in order to provide these services."
What challenges do people working in digital investment banking face?
"We're talking about dealing with a great deal of private information, and a lot of information that isn't organized well in the business environment. In order to do this digitalization thing, you have to develop a different methodology for analyzing the environment."
The regulatory challenges
The technology is moving very quickly but the regulation less so. How can you bridge this gap?
"Some of the regulators around the world are genuinely trying to fill the gap. In Britain, for example, there is the FCA, which allows fintech companies to work together with the aim of understanding their competitors' regulatory framework. We very much support this, and are ourselves looking into many of the regulatory challenges in places in which we would want to apply technology in the future."
From which industry will the next unicorn come from in your opinion? Perhaps from payment transfers?
"When you speak about the next unicorn, you have to answer two questions. The first is how will the market value an existing ecosystem, and the second is what is the value of the next new thing that will come out? Out tech center in Israel is concentrating on adopting cloud technologies for organizations, blockchain, cybersecurity and big data. If there is a startup in the area of the shift to cloud computing that can really bring about change, then in my opinion that is where it will be able to create value in a significant way."
Published by Globes, Israel business news - en.globes.co.il - on December 13, 2020
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