Israel Is Reportedly Preparing to Finally Roll Out its Fintech Regulatory Sandbox Program, which is Part of Proposals in New Arrangements Law

Israel is reportedly getting ready to launch a Fintech regulatory sandbox, in order to make it easier for local financial technology startups to test out new products and services.

The Arrangements Law that the nation’s Treasury will be presenting to the cabinet will include rules that recommend establishing a regulatory sandbox that will give local fast-growing Fintechs a flexible environment to test new financial products.

Earlier this month, five Israeli Fintechs were chosen to take part in a separate pilot program to enhance the nation’s capital markets.

The Israel Securities Authority (ISA) and the Israel Innovation Authority chose five Fintech firms to take part in their Data Sandbox pilot program, which aims to support local financial technology projects and companies. The initiative is part of a strategy led by the ISA. It’s focused on developing more competitive and accessible capital markets.

The Securities Authority believes it’s very important to work cooperatively with regulated entities by meeting the real-world requirements of the Fintech (and larger tech) industry.

The companies chosen for the data sandbox include Zirra.co, an Israeli trading analytics company that offers structured data-driven insights by leveraging AI.

Scanovate, a Ramat-Gan based company that aims to offer a software-as-a-service (SaaS)-based Identity Provider, has also been selected to take part in the program. Correlate Capital, a tech firm focused on developing trading and liquidity provision systems, will take part in the sandbox as well.

Two firms were chosen to carry out a pilot with the authority while working with trading data obtained from the TASE (Tel-Aviv Stock Exchange). Fintica AI will be using AI and Wizsoft (Israel), which offers enterprise resource planning (ERP) solutions and also provides data mining and machine learning systems,  may be used to support the pilot.

Fintech firms in Israel received $1.8 billion in total investments last year, with OurCrowd, Sequoia making substantial contributions.

Israel-based OurCrowd, the world’s largest investment crowdfunding platform, recently announced the launch of a $100 million Pandemic Innovation Fund.

The Fund will invest in both new startups and certain companies already included in OurCrowd’s existing portfolio. OurCrowd founder and CEO Jon Medved said it was time to “move fast and fix things,” – a play on the Silicon Valley mantra of breaking things with disruptive innovation.

In an interview with CI last month, Igal Rotem, founder of Israel-based Fintech Credorax talked about various business continuity plans during the COVID-19 crisis.

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