AI Adoption in Israel’s Fintech Community

This article explores how AI is being adopted across Israels fintech community, why it matters.

Growing Ecosystem in Israel

Israels fintech sector, though impacted by global funding downturns, has proven remarkably resilient. According to the report, in 2024, fintech secured 12% of total venture capital invested in Israeli startups, second only to cybersecurity.

AI and Fintech

Despite the technological momentum, only about 7 % of financial firms in Israel have adopted AI at scale:

• Risk, Fraud, AML: Companies like ThetaRay leverage patented AI algorithms to detect money laundering, unknown threats, and fraud patterns.
• Investment and Asset Ops: FundGuard, an AI-based investment platform founded in 2018, streamlines operations for mutual funds and pension managers. In 2024, it raised $100 million in Series C funding, reaching a valuation of up to $400 million.
• Personalized Marketplaces: Finq offers an AI-powered marketplace for personalized financial products—retirement, investment, insurance—with a $6 million backing from industry investors.
• Customer Support with AI: Tel Aviv startup Wonderful has raised $34 million to build AI-powered, multilingual support agents—starting with Hebrew and expanding to other underserved languages like Arabic, Dutch, and French.

Support for AI in fintech is also manifesting through venture capital. OurCrowd launched an AI-focused fund and collaborates with Nvidia‘s Inception programme to support deep-tech startups—including digital banking and AI video generation—supercharging their development path. At a broader level, Israel’s government is building a $250 million national AI strategy (2024–2027), including a tender for a supercomputer to support AI R&D across industries.

Challenges & Roadblocks

Despite these promising developments, adoption faces hurdles. Infrastructure integration, regulatory complexity, and trust in AI systems remain challenges. Moreover, while Israeli fintech is globally prominent, domestic adoption lags—impacted by conservative market dynamics and evolving open-banking regulation.

For Israels fintech landscape, 2025 and beyond could mark a tipping point. As global interest in AI-powered financial platforms grows—and with regulatory frameworks becoming more supportive—AI adoption is poised to leap. Startups that can bridge the local adoption gap—while maintaining global scale—will lead the next wave. The sectors with the highest potential include fraud prevention, risk analytics, customer support, and investment infrastructure.