Mind the Tech NY2021
Banks must embrace the startup ecosystem to keep up with innovation, says Leumi CIO
"Only when combining their dreams and execution speed with the bank's know-how, data and customer base, we can create real-world breakthrough financial products," says Jaime Schcolnik, VP, CIO, and Head of Leumi Technologies at Bank Leumi
"Traditional banks are in a transition process to becoming technological product companies, with digital customer services and API based B2B processes replacing branches and human-delivered services and products. If Bank Leumi wishes to continue to lead, we must embrace the startup ecosystem, cooperate and partner with it in order to be at the forefront of the banking industry," said Jaime Schcolnik, VP, CIO, and Head of Leumi Technologies at Bank Leumi, speaking at the Mind the Tech NY2021 conference on Tuesday. "This requires the bank to open up to true partnerships and cooperation with startups, since only when combining their dreams and execution speed with the bank's know-how, data and customer base, we can create real-world breakthrough financial products."Schcolnik spoke about how Bank Leumi, which is celebrating its 120th birthday next year, was, as the majority of the traditional banking industry, normally closed. It developed its own systems, designed its own products, using well-proven, commonly used platforms and solutions. "This approach was in-line with what was considered the best cyber security practice: strong perimeter defenses with tight access control and rigorous network traffic inspection, allowing for very limited functionality to be accessible from outside the bank campus," explained Schcolnik. "Recent years business and technology trends such as cloud computing, digital banking services, e-commerce and open banking have rendered this approach insufficient for the increased need for online connectivity, while as a defensive strategy it became inefficient with direct encrypted connections between bank users and cloud-based services. This is further amplified by the main types of cyber threats targeting commercial organizations worldwide, with the financial sector being at the forefront of the target list. We, in Israel have even more fun, unique to us, in the form of Palestinian, Iranian and Lebanese originated cyber threats routinely targeting Israeli organizations, with the financial sector again in the focus. These threats, typically representable by ransomware attacks, utilize the weakest point in the organization's perimeter defenses to penetrate into the network, and in order to mitigate these threats the classic perimeter defense approach is not enough. The Covid-19 pandemic has accelerated this process dramatically with the majority of our customers doing their banking remotely and the majority of our workforce working from home at certain points, requiring full remote access to practically all financial systems."