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Fintech City Tour goes to Israel to see ID & Security innovation
ID and Security is key to Payments – that is the story behind Klarna. The reason payments is expensive is mainly that stopping the fraudster is a tough technical problem. The bad guys are smart and relentless because there is a lot of money at stake.
So, you head to Israel, the StartUp Nation that is renowned for solving tough technical problems related to ID and Security:
“A nation with only 7.1 million people and 63 companies were listed on the NASDAQ, more than those of any other foreign country.”
The name that most people associate with Israeli high tech is CheckPoint, the company that created the firewall.
A common Israeli startup story is a couple of engineers working for the Israeli Defense Force (IDF) apply their minds to the technical challenges around security and then, having built close personal friendships during their military service days, they get together to found a startup.
Seeking a guide to Israeli Fintech, I asked a friend from my New York days called Ted King of Saddlerock Advisers, one of the “go to guys” for Israeli startups making connections with investors and strategic partners in New York. Ted connected me to Amir Orad, who exemplifies why Israel is a startup nation and so strong in ID and Security. Amir Orad is the co-founder of BillGuard and CEO Of NICE Actimize. Anti-Fraud, AML and Cyber Security are his areas of expertise.
Israel has one of the biggest exits in Fintech, the $900m acquisition of Trusteer by IBM – putting them on the “almost Unicorn but fully realized” podium.
Amir pointed out that Israel shared a trait with Silicon Valley, which was founders getting an exit and then going for another one and another one….
For example, PayPal acquired Fraud Sciences in 2008. If you look at the past team, you see some pretty cool startups:
Geva Solomonovich at Open Bucks, which is using Gift Cards from retailers to pay online.
The common thread is getting the balance right between security and friction. Designing a totally secure system is easy, as long you can live with high levels of abandoned shopping carts. Low friction/high security is a tough technical problem.
Ohad Samet, another Fraud Sciences alum, went on to Analyzd which was acquired by Klarna and is now at True Accord which is focused on debt recovery (a tough problem that I have not seen anybody else tackling in a fundamental way).
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Israel is the 10th stop so far on the Fintech City Tour which has visited:
