Commonwealth Bank of Australia’s new deal with Israel’s financial technology company to fund joint research and development projects, signed last month, would be mutually beneficial to both parties, according to Israel’s Economy Ministry Chief Scientist Avi Hasson. CBA is the first Australian firm to join the Economy Ministry’s Multinational Corporations (MNC) program.

Founded in 1911 by the Australian government, Commonwealth Bank is a multinational Australian Bank with branches across the US, Asia, Britain and New Zealand.

The Times of Israel reported that the bank was valued at US$115.4 billion (AU$159 billion) and its profits reached US$7.7 billion (AU$10.6 billion), making it Australia’s largest.

The MNC is known to work with several international and non tech giants in the development of new products in Israel for use around the world.

The MNC, under the direction of the chief scientist, will look for emergent but deserving fintech to financially support in terms of their research and development projects. Financial support, in line with the agreement, includes investments made through equipment lending, providing technological and regulatory consultations and even marketing directives. Consequently, the company chosen should coincide with the bank’s criteria.

The deal is part of Israel’s thrust towards the development of stronger research and development efforts with countries around the world.

According to Hasson, the program is a testimony on the global scope of the project. He added that there is hope for fintech companies even those outside of Israel.

Israel’s giant leap in the fintech industry

Techcrunch described Israel as a country where, “Hundreds of local start-ups are developing new technologies for payment and security solutions, and multinational companies and banks are flocking to Israel for a piece of the action.”

Studies revealed that investor interest in Israel’s fintech grew 15 percent in 2014, and about 43 companies raised capital in the first three quarters of 2015. Quoting IVC Online, Techcrunch noted that the 61-company record US$369 million (AU$510 million) funds raised in 2014 will break records in 2015.

Furthermore, Israel is fully aware that the success of its fintech industry stems from other sectors such as finance and technology, which the country is known for. Its large and innovative financial sector has successfully overcome the 2008 financial crisis and it possesses sturdy security solutions.

However, there is still a lot to learn from fintech companies in leading finance hubs, New York and the United Kingdom.

New York is home to “high-profile” unicorns that have entered public consciousness, that even huge tech giants such as Google and Apple are unravelling the sector’s potential, according to Finextra.

Half of the fintech investments are directed in London, making it the center of fintech in Europe. Recently, Silver Falcon Plc (SILF:LN), another shell investment fintech start-up, was welcomed in the London Stock Exchange.

According to London & Partners, London’s fintech start-ups have attracted £343 million (AU$703 million) of investment in 2014, three times more than in 2013.

Fintech in Israel is one the country’s growing high tech sectors alongside new fintech hubs such as Australia. The continuing support from banks and the government paved the way for Israel to leverage their fintech industry.

“The country will continue to draw resources, human capital and innovation from sectors where Israel has already established itself as a world leader,” Techcrunch reported.

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