Tough Times Birth Better Companies: Banker-Turned-VC on Fintech’s Future

After spearheading the digital transformation of Bank Leumi, Rakefet Russak-Aminoach, CEO of the biggest bank in Israel, stepped down to join Israeli venture capitalist firm Team8 as a managing partner in 2020. Russak-Aminoach is now offering her insights on the fintech sector to banks, highlighting the importance of collaboration between the two industries and predicting the future roles of embedded fintech and embedded banking. Russak-Aminoach also believes that artificial intelligence will be transformative for both banks and fintechs. Fintech funding and investments have changed since 2021, says Russak-Aminoach; now, good fintech firms are getting funding and valuations are lower but healthier. She also believes that embedded banking and fintech will be strong strategies for both banking and fintech sectors, making it easier for them to find new customers. According to Russak-Aminoach, banks can partner with fintech firms to integrate services with existing products and customer bases, such as through April Tax Solutions, where customers’ taxes can be prepared in 40 minutes or less and deposited directly into the bank or fintech app. In addition, she thinks that embedding banking services into a partner’s website or mobile app would be more beneficial than banking-as-a-service arrangements that provide compliance concerns. Finally, Russak-Aminoach shared her enthusiasm for generative artificial intelligence, which she believes is enabling a new wave of cost-saving for banks, particularly around contracts.