When traditional financial institutions, startups and regulators are all focused on the same topic, you know something big is going on.
The big trend in question is financial technology, specifically new fin-tech companies backed by venture capitalists. With over $36 billion invested globally across more than 3,000 VC-backed financial deals since 2011, the financial services world is, many believe, ripe for disruption.
In an effort to understand the current fin-tech revolution and what we can expect next, Battery hosted a small group dinner in Tel Aviv for a number of fin-tech experts and entrepreneurs, along with founders and executives from a some of Battery’s fin-tech portfolio companies: Credifi*, Cross River Bank*, Istra Research* and N26*.
Maximilian Tayenthal, co-founder and CFO of N26, said at the dinner, “We’re going through a period of major disruption and change, and for the first time, technological challengers are well positioned to replace the traditional players” in the industry.
But change is never easy: Innovative fin-tech players are posing challenges to policy makers and regulators, who are caught between encouraging new technologies while continuing to protect consumers in highly regulated markets.
“The industry has developed and matured since I started the bank eight years ago”, said Gilles Gade, founder and CEO of Cross River Bank, which provides banking services to marketplace lenders and online payment providers. “The recent entry of regulation is a welcome change that will help to create a fair and safe ecosystem with clear rules for all stakeholders”.
Overall, Battery remains excited by the possibilities of new fin-tech ventures. “The combination of massive market opportunities, nascent but rapidly modernizing technological infrastructure, and the frameworks we are seeing from regulators leave us very excited by the prospects for financial technology startups over the next few years,” said Battery Vice President Shiran Shalev, who attended the dinner.
*For a full list of all Battery investments and exits, please click here.