The following is the full speech:
The financial market is at war.
Game of Thrones is here, the centers of power and mediation are being undermined and changing.
The control of the financial consumer public, which has hitherto been in the hands of the banks, is moving to the battlefield of competition against new players that undermine traditional hegemony.
The balance of power is changing.
The new players, the fintechs – Big Techs come up with new plans.
They challenge traditional business models. They come with more sophisticated weapons – technological and advanced.
This is not just a war for us, this is a war all over the world.
A war between the traditional world and the modern world, which is today in many ways, in a defensive position.
So what is our role as regulators?
The role of all financial regulators, ultimately, is to care for the benefit of the consumer.
Each regulator and regulator according to its mandate.
The challenge for all of us is to balance financial stability with sustainable competition.
So what exactly does the consumer want?
Receive financial services, with minimum cost and time and maximum simplicity – tailored to his personal profile.
But, a low cost to the consumer means less profit for the service provider. In order to provide a quality and accessible service in a short time, one must adopt innovative technology that may be costly.
Sometimes it also requires a transformation of old systems in the news and a reduction in manpower.
Therefore, it is quite clear that the balance will necessarily be achieved at the expense of reducing the traditional profitability of the financial system.
But, will financial stability necessarily hurt?
The connection between reducing profitability and impairing stability is not bound by reality. What is certain is that a lower traditional profitability level of the financial system means a higher value transfer to the end consumer. And not necessarily an injury to stability.
In addition, it can be seen that in line with trends in the US and Europe, in the relationships between banks and fintech, banks can also benefit from the sale of services to fintech and not just from the sale of financial services to the end consumer.
As part of the changes currently taking place in the financial system, the Securities Authority has taken on the responsibility of regulating the activities of fintech in the field of financial information services and payment services.
We thank the Minister of Finance for the trust he has placed in us.
As early as March 2022 we intend to grant first licenses to the new players who are on the doorstep.
Who will be affected by the entry of new players?
First of all, on the public.
The public will be able to receive a variety of services digitally and simply by the new players.
The consumer public will be able to choose the financial service they need. Whether it’s loans, deposits, Investment consulting services, Mortgages and all related banking services.
They will also be affected by the move – small and medium-sized businesses.
The new space that will be created will allow small and medium-sized businesses to receive cheaper financial services. The new space will offer a variety of alternatives for obtaining fast and cheap non-bank credit through advanced technology and the use of databases.
As you know, for every 1.3 businesses that open a year on average, one closes. In practice, this is an average of about 30,000 businesses each year, partly because their access to efficient funding sources is limited or non-existent.
The non-bank credit market for small and medium-sized businesses has stalled since before and to this day stands at about 2.3%, of the total credit for small and medium-sized businesses.
This means that the banks are still in complete control of the fate of small and medium-sized businesses in Israel.
Our goal is to produce quality and inexpensive alternatives for small and medium-sized businesses.
When we talk about a war in the financial market, we must also talk about the new, turbulent and kicking market that seeks to undermine the rules of the game.
I’m talking about the crypto market and digital assets that generate both risk and opportunity.
Blockchain technology presents us with facts that cannot be ignored.
Technology is challenging the Securities Act, the currency definition and the definition of financial assets and is actually pushing us, the regulators, into a corner.
Regulation must keep pace with the public in order to receive the appropriate protection and to realize the full economic potential inherent in the development of activity in the country.
The public cannot realize profits and pay taxes in an orderly fashion and also remains exposed to fraud and deception, without protection.
It is important to note that another consequence of this situation is the loss of intellectual property and revenues from technology developed by Israeli entrepreneurs to competing countries.
This is an unrealized opportunity, at this point.
A holistic regulation of the crypto field is required.
A regulation that will provide a comprehensive solution to all aspects involved in this activity.
The situation where the world of digital assets is regulated and operates in a way that produces broad cracks, creates delinquency, encourages economic crime and blocks the development of financial activity and the legitimate use of the tools it imparts.
I am glad that the Minister of Finance has placed this issue as strategic and set up a team to examine the long-term policy.
The Securities Authority is prepared for the challenge and is ready to assume the authority for holistic supervision of the field.
So I started Game of Thrones, so let’s talk about Halisi.
A leader, strong, smart, who worked in a male company, who managed to get behind the scenes to the front of the stage and change the course of history and the way the game is played.
There is a lot of Halisi in the Israeli market. Here, too, in this hall.
Each, carries the dragon egg close to its core.
It’s time to release the dragon.
In 2021, in an advanced and enlightened country, where Israeli women stand out for their achievements in Israel and around the world,
Only 16% of companies have more than 35% women on the board.
To me this is an unbearable situation. This is not the world I want to leave to my granddaughters.
Diversity means plurality of opinions.
Gender diversity is the basis for all.
Diversity produces growth and innovation and these are essential values for ensuring the sustainability of entities in the long run.
So how is it that in Israel we are still behind?
The Israeli capital market is characterized by the fact that most public companies are controlled by controlling shareholders.
Each of them has the circles closest to it.
They are mostly men.
Not because they do not value women.
Most of them probably have a successful spouse and daughters, of whom they are proud.
Each of them is a potential Halisi.
They are not sitting around the table, yet.
At its simplest, women are not part of the club.
Therefore, I set up the 35 Plus forum – I believe it’s time to act to change the situation.
The forum will promote gender diversity, while connecting all stakeholders relevant to the topic.
We will support companies that are interested in making a change and often do not know where to start.
Since we announced the establishment of the forum, we have received inquiries from many bodies interested in helping advance the move.
Gender diversity is perceived among investors around the world as a value – not just cultural and value – but as an economic value.
At the same time, in order to influence, in addition to the power of the controlling shareholder, the support of minority shareholders in the vote for gender diversity is required.
I congratulate the first investment house that declared last year that its voting policy would be based on gender diversity.
I invite and encourage more entities to join.
I will end with a quote from the words of Megan Merkel, the Duchess of Sussex.
Duchess Merkel attended the UN General Assembly on the occasion of International Women’s Day in 2015 and in an inspiring speech said the following:
“Women need to be seated at the table. They need to be invited to join the table.
And in some cases, when the table space is not available to them, well, they have to make the table themselves. ”
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