Fintech Cooperation Agreement Signed Between Israeli And Bahraini Regulators
The Central Bank of Bahrain and the Israel Securities Authority have agreed to collaborate in order to better assist fintech businesses and entrepreneurs in both countries. As part of their efforts to strengthen economic links, the Central Bank of Bahrain and the Israel Securities Authority have inked an agreement to work together to foster innovation in the financial technology sector and to give regulatory support to the sector.
As part of Foreign Minister Eli Cohen’s visit to the Gulf nation this week to improve commercial and civic ties, including negotiating a free trade pact, the two countries inked a fintech cooperation agreement on Monday. The US-brokered Abraham Accords, which included normalized ties between Israel and the United Arab Emirates, Israel and Bahrain normalized ties in 2020. Months later, relations with Morocco were able to return to normal thanks to the pact.
Cohen witnessed the signing of the collaboration agreement between the Israel Securities Authority and Bahrain on behalf of Deputy Director of International Affairs and Markets Development Ron Klein and Foreign Minister of Bahrain Abdullatif Al Zayani. Fintech entrepreneurs and startups in both countries that are in the early phases of development or the clearance process will benefit from the collaboration agreement as government officials from both nations will work together to provide regulatory guidance and support.
To encourage and support innovation in the financial services industry and to make regulatory access more straightforward for entrepreneurs interested in expanding into new global markets, the two financial market authorities have agreed to exchange information and share knowledge.
The Central Bank of Bahrain is the single financial sector supervisor in Bahrain, and it is charged with ensuring the kingdom’s economy and currency remain stable. As a gateway to the Gulf Cooperation Council—an intergovernmental and economic union that also includes Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—Bahrain is seen as advantageous for investment and business collaboration.
According to Start-Up Nation Central, a non-profit that monitors Israel’s tech industry, the kingdom’s supportive legislation and taxation policy in areas like financial services and its investments in technology to build a strong digital economy make it an attractive place for Israeli startups to seek business partnerships.
For the next chairman of the Israel Securities Authority, Yosef (Seffy) Zinger added-
“Building bridges to support the global activity of Israeli companies in this industry” is of paramount importance. In order to promote digital financial services in Israel, “we continue to advance the open banking reform… and work cooperatively with our counterparts around the world to create an ecosystem.”
By allowing non-banks to offer services at competitive prices, the open banking reform that went into effect in June 2022 aims to introduce competition into Israel’s financial industry and excessively consolidated banking system, hence lowering costs for customers.
The reform would allow fintech startups to get licenses that will give them access to customer data stored by the major banks in Israel. The payment services reform, which is scheduled to take effect in 2024, will also allow companies that have been granted a license by the Israel Securities Authority to provide payment services, including digital wallets, to consumers and businesses in direct competition with banks and credit card companies.
“The payments reform will lay the infrastructure for non-bank payment operations in Israel,” Zinger added, “and enable a holistic business model for the fintech industry in Israel.”
Since the advent of bitcoin and blockchain technologies, Israel’s fintech industry has grown rapidly, collecting $7.2 billion in investments in 2021—more than three times the amount raised in 2020. Capital raising by fintech firms decreased to $2.7 billion in 2022, according to data from the Israel Securities Authority, as a result of the downturn in global financial markets and the decline in valuations of technological enterprises.
Fintech is a rapidly growing industry that is transforming the way we think about finance and banking. Here are some countries that are leading the way in fintech innovation, based on the searches we have made a post adding all the important details.
There are over 550 financial technology companies based in Israel, which together employ approximately 20,000 people in Israel and 18,000 elsewhere. Papaya Global, a payroll and payments management platform provider; Riskified, a fraud prevention for e-commerce; Melio, a developer of a payments platform; Rapyd, a facilitator of multi-currency payments; and Tipalti, a developer of a payments and compliance tech platform, are just a few of the 20 Israel-based fintech unicorns currently valued at over $1 billion.
To encourage the growth of the fintech sector in Israel, the Israel Securities Authority established a regulatory innovation hub for startups and established enterprises in the sector in 2018. The program’s goal is to have fintech firms and startups collaborate with the regulator so that they may better understand the regulatory environment and modify their operations to conform to the requirements set forth by the regulator.
In August of 2022, the Israel Advanced Technology Industries (IATI), a conglomerate of Israeli high-tech and life sciences companies, teamed with a Bahraini financial cluster to create new projects. The goal of the collaboration with Bahrain FinTech Bay in Manama is to improve communication and networking between entrepreneurs, corporations, and VC firms looking to invest or expand in both nations.
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