At Israel IT Summit, ‘Bruised’ Optimism and Innovation that Goes Beyond AI

Exactly six months after October 7th, the Israeli Chamber of Information Technology held its annual IT Summit, attracting around 3,000 participants from across the board in tech.

Walking the halls and pathways at the packed event, held at a sprawling venue in a Tel Aviv suburb, I encountered executives of the largest tech firms, representatives of pretty much any government agency, and, in one case, a couple of freshmen looking for a job at IBM.

Aptly for an IT chamber event, perhaps, it went smoothly and content sessions were displayed not only in a packed speaker hall but on screens and loudspeakers throughout the venue.

The prevailing sentiment, both on and off stage, was ‘mixed feelings’, between a mild dosage of cautious optimism and deep concerns regarding the War in Gaza and its potential consequences.

Eli Frank, the Chairman of Israel IT Chamber, was squarely positive. “The negative sentiment is political, but when it comes to business, I recognize that the world appreciates Israel’s tech capabilities,” he told Finance Magnates. “That’s why you see investments returning.”

Supporting this spirit, to some extent, were figures presented in two panel discussions, pointing to startup funding recovery (17% uptick in deal worth in Q1 compared to Q4 2024, according to Deloitte; 10% in funding volumes QoQ, per Blumberg Capital’s MD, Yodfat Harel Buchris).

However, these numbers assume a darker tone compared to pre-war and pre-judicial reform environments. Words like 'complex' and 'challenging' kept coming up in conversations, as other panelists highlighted the uncertainties and challenges ahead.

“Business owners committed to meeting schedules would hesitate to invest in a development centre in Kyiv, for example, and today this sentiment is extending to Israel too,” said Ben Pasternak, the CEO and Owner of Aman Group. Somewhat ominously, he went on to urge listeners to consider developing capabilities that international players currently provide.

"The Israeli hi-tech is alive and kicking," concluded Blumberg’s Harel-Buchris, "But, it is bruised."

Non-AI Innovation

The Summit’s theme was “Digital & AI Storm – Steering The Future.” Frank told me, between a radio interview and shaking hands with peers, that the Summit represents the peak of various meetups held by the Chamber throughout the year.

Indeed, after the sessions in the main hall had concluded, no less than eight separate content streams went on in parallel. I attended the fintech one and found the moments when it was not AI that created innovation or value propositions most interesting.

Talking about pensions and retirement plans for high-tech executives, Yair Ben David of Kedma Wealth Management showed mainly what AI can’t do. Bespoke and agile decision-making, he meticulously demonstrated, is still very much needed to generate the best returns. At least one fellow speaker took a business card.

Later on, in a passionate speech peppered with good-humored jabs at competitors, Sarit Beck Barkai showed how innovation can start with listening. Spotting unpredictable user behaviour has led PayBox to launch “Boxes,” a banking-like service allowing users to manage funds outside the bank. “Israelis don’t want to feel that they are suckers.”

If banks don’t innovate “fast enough” compared to fintech firms, as stated by eToro’s deputy CEO, Hedva Ber, this can be a good place to start.

In her speech, the veteran ex-banking regulator emphasized elements of eToro’s offering that are well-known to readers of Finance Magnates, such as copy trading or fractional shares, as drivers of change and financial inclusion.

For others, innovation is to be found on a larger scale. Airwallex’s Head of Israel and Middle East, Or Liban, walked attendees through the brief history and bright future of Embedded Finance, which is expected to facilitate a whopping $700 billion in 2032.

He defined Embedded Finance as “non-financial firms offering financial products,” which may sound obvious but remains a boon of revenue streams and retention for SMEs, which otherwise suffer “financial discrimination.”

Airwallex is the only tech firm I know of whose founders first launched a coffee shop to experience retailers’ pain points firsthand, and this approach seems to trickle through with the group’s expansion.