What AI Can't Generate and How Israeli Tech Stays Strong

<p>Soon after October 7th, Israeli tech was split between
“no, everything is not ok” and “we deliver NO MATTER WHAT.” While the end of
the war is nowhere in sight, and in fact it’s more likely to spiral into a
wider regional conflict (spiraling into a regional conflict is a more likely
scenario), things seem to morph into some sort of a “new normal.” </p><p>That, at least, was the sentiment at the recent Fintech
Junction 2024, an Israeli tech conference held on Wednesday at the Tel Aviv Stock
Exchange.</p><p>Hope amid Challenging Times</p><p>Speaking as the event wrapped up, Ben Pelled of Lynx
Events, the conference organizers, was unreservedly enthusiastic: “In these
tough times in Israel, <a href="https://www.financemagnates.com/terms/f/fintech/">fintech</a> cast a blinding light of possibility. This conference
wasn't just about business, it was about people, collaboration, and building a
brighter financial future for all.”</p><p>Gathering over 250 attendees from the local fintech
industry, the event brought together unicorns like Pagaya and Melio, banks, and
startups at various levels of stealth and fundraising rounds. </p><p>Conversation both on and off stage revolved around
fintech’s current state of maturation, traditional and generative <a href="https://www.financemagnates.com/tag/ai/" target="_blank" rel="follow">AI</a> (and what
each can and cannot do in financial services), and, naturally, adapting to the constant
disruption brought about by the war.</p><p>A Fintech Tipping Point</p><p>A decade since entering the financial conversation,
fintech’s mission seems to be finally shifting from disruption to collaboration.
</p><p>“In 2013, [banks] thought 'I’m building to sell and do
an exit'; then they thought 'I’m planning an IPO.' Now there seems to be a
better understanding of the role fintechs play,” said Gal Aviv, the Founder and CEO
of Blender.</p><p>His fireside chat with Or Kaplinsky from Amdocs, who shared pain points from his experience propping up a banking startup, touched
upon the upside for startups.</p><p>“Fintechs, on the other hand, need vast funding to
handle vast data, and can’t handle so easily integrations with the IT
departments in banks,” Aviv said.</p><p>The opportunities they recognized for fintech firms lie
precisely in this gap, between core banking and cutting-edge. Lean and mean startups
are “the middle layer of stuff like operations, compliance, and operations,”
according to Aviv.</p><p>Nothing to Generate Yet?</p><p>Another big topic was, quite obviously, generative AI
and its applications in financial services. Showcasing the capabilities of
IBM’s WatsonX, Tal Schahar, the tech veteran's World Wide Data &amp; AI
Delivery Leader, pinpointed the importance of tailored training of LLMs for the
needs of financial services.</p><p>"GPT is great for generating poems and homework,"
he said. "But it can't cover everything."</p><p>A later panel echoed this opinion, parceling out the
challenges in implementing generative AI in dealing with sensitive data. </p><p>"In hard-core <a href="https://www.financemagnates.com/terms/p/payments/">payments</a> and fintech, at the moment
there is not much to generate," said Shiri Schnieder, the CTO at PayU. </p><p>GenAI can be particularly useful in improving efficiency, especially within development team</p><p>"It is not suitable for every developer,
though," Schiender said, highlighting that senior staff members should have
a better understanding of how to deal with LLMs' shenanigans. </p><p>If a fully-fledged generative AI is the future of
<a href="https://www.financemagnates.com/tag/payments/" target="_blank" rel="follow">payments</a>, the present is dominated by a more traditional iteration: Machine
learning. </p><p>Schneider presented two notable use cases: increasing
transaction approval rates, and detecting broader anomalies. While the former
is focused on choosing the best pathway within the processing ecosystem, the
latter can help firms with breaches of behavioural patterns. </p><p>While today is certainly a challenge, and the road
ahead seems uncertain, the future is promising and, despite all the uncertainty, Schahar got it right when he said: “In finance, yesterday's buzz is today's
reality." </p>

This article was written by Finance Magnates Staff at www.financemagnates.com.