Citi’s Israeli innovation ensures bank stays ahead of rivals

Executives who visit go back ‘wowed,’ Citi Israel CEO Neil Corney tells ‘Post.’

By EYTAN HALON
Updated: JANUARY 6, 2019 08:31
Citi Israel CEO Neil Corney (photo credit: EYLON YEHIEL)
Citi Israel CEO Neil Corney
(photo credit: EYLON YEHIEL)
American banking giant Citi prides itself on its business activities across more than 160 countries, yet much of its fintech innovation prowess has emerged from one of its more modest markets – Israel.
Benefiting from government support, Citi set up its first Fintech Innovation Lab in Tel Aviv in 2011, and has inspired company-wide innovation since its establishment. The bank has subsequently opened labs in London, Singapore and New York.
“The CEO of Citi who inaugurated our lab described Citi not as a bank but as a technology company with a banking license,” Citi Israel CEO Neil Corney told The Jerusalem Post.
“It’s a bit of a cliché, but it’s clear that Citi understands that technology is the driver of everything going on at the moment.”
Demonstrating the emphasis placed by the bank on Israeli innovation, Citi employs more technologists in Israel – approximately 200 – than bankers.
Its innovation lab focuses on a range of banking-related fields, including capital markets products and traded assets, operations and technology infrastructure, artificial intelligence and machine learning, and data science.
Following the initial success of the innovation lab, Citi Israel opened up a Big Data Lab in 2013, and Security Lab two years later. Public solutions developed by the Tel Aviv lab to date include the mobile version of the bank’s research and trading platform Citi Velocity, as well as digital proxy voting platform Citi Proximity.
While initial fears that traditional banking might be eventually replaced by services offered by technology giants such as Amazon or Google have not materialized as customers place their trust in big banks with centuries of market of experience, banks have faced pressure to meet the evolving demands of the public.
“Investment in technology is very high because we need to stay ahead of our competitors,” said Corney. “In order for us to really succeed, the magic formula is to work out how to work with local start-ups.”
Established in 2013, the bank’s Citi Accelerator program for Israeli start-ups has already assisted some 80 companies, who have together raised over $650 million in funding.
Accelerator success stories include mobile payment keyboard start-up PayKey, VAT analysis software developer VATBox, artificial intelligence-based call center agent company Voca and e-commerce shipping solution firm Ladingo.
The number of the start-ups applying to join the initiative has grown from 50 in its first year of operation to 200 today, with applicants seeking what Corney refers to as the “Citi Accelerator stamp of approval.”
Encouraged by the innovation emerging from Citi’s Israel operations, the bank’s global corporate venturing arm Citi Ventures has also opened a branch in Tel Aviv to directly invest in Israeli companies.
“These are not investments to generate income but to engage with technology and possibly change the way Citi is going to be doing business in various fields,” Corney said.
Citi’s innovation success in Israel shows no sign of slowing down, with Corney explaining that bank executives regularly visit the Tel Aviv offices and return to their headquarters enthused at what they have seen.
“I think they all come with some kind of knowledge but, without a doubt, once they’ve been here and visited the lab, seen some of the start-ups and technologies going on here, they go back wowed,” said Corney.
“For example, take one of our global heads who came here under a month ago. He was so impressed that when he returned, he was grabbing people and saying ‘you have got to go to Israel and see what’s going on there.’ It’s just unbelievable.”