Deputy CEO Head of Corporate Banking Division, Bank Leumi
Mind The Tech NY2017 - Yifat Oron and Kfir Godrich
צילום: עמית שעל.
About Yifat Oron
Yifat Oron, Deputy CEO and Head of the Corporate Banking Division at Bank Leumi, has spoken publicly about the role of the banking system in Israel's technology sector. In a 2023 interview, she stated that the banking system had been "completely lacking" as part of the "startup nation" ecosystemikuha. She has also discussed the need for more talent in the tech industry, saying that Israel is "lacking thousands" of people that companies would hire if they could find them. Oron has commented on global technology trends and geopolitical dynamics. In 2019, she noted that regulators and politicians have debated whether large technology companies should be split up, with some arguing they are "too big to fail" and others that their parts would be worth more if separated. She also remarked that Israel may need to decide "who is a friend" in terms of capital sources. In 2017, she said that China's restrictions on outbound capital had caused a "significant decrease" in investment flows into Israeli tech. Oron has also emphasized the importance of unit economics in technology investing, stating that companies had "forgotten about being profitable" while focusing on revenue growth.
Transcript (12 segments)
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Yifat Oron0:00
Welcome everybody. My name is Yifat Oron, I'm the CEO of Leumi Tech. For those of you who don't know, Leumi Tech is actually the Leumi Group banking arm for technology companies, and we're very proud to be working with around sixty percent of the Israeli startups. So that's a little bit about us. I want to do a very quick introduction before I invite our next guest, who's going to speak to me about very exciting things. I want to talk about what is the world actually telling us, you know, what's going on, globalization issues, and how is it going to affect us, especially Startup Nation. So I think we've heard since this morning, reading the papers, the world is going crazy and we're seeing really tectonic changes in every single aspect we can think about. Brexit, I'm not going to say anything other than nothing is obvious anymore. We've heard enough about this today. This is the VIX index. I think you can look at it and you can see that it's very transparent that everybody is a little shaky, knowing nobody understands what's going on. I don't even know how to begin discussing Trump, but I think it's sort of like the new era of Trump is in the house. I don't know what that means, I don't think anybody knows what that means. The one little thing I wanted to remember though is one of those things which is probably going to affect us in Israel, which is a lot about the repatriation that Trump is endorsing. I think that in the war of you-know-which state, in which country is sexier to absorb the technology companies, I think this is a big issue for us which we have to keep in mind. Obviously Europe is giving us exciting news, and I think about a year ago we started with Brexit. We had England and sort of the rebel which wants to get out, starting sort of a little quiet war between England and the rest of the European Union. And I think the little things about who's going to be more attractive, who's going to have better taxes, who's going to bring over the big banks, who is going to be more attractive to technology companies, this is a year ago. A few weeks ago we were witnessing what's going on in France, and I think we're all a little shaky. We didn't know whether the European Union is actually going to stay a European Union. I think for now we're a little bit comfortable with what it looks like, and the Euro seems like it's going to actually stay as a currency. But again, we still have other countries that are going to have elections and we'll see how that will affect everything else. China, one of the things that we're seeing in Israel very evidently is that China is very interested in technology. And I think we all know China is trying to have its own technology, so they're leaning more towards acquiring technologies, acquiring companies, investing a lot in companies. We in Israel have seen a lot of money flowing into technology investments. We are a little bit worried because recently the Chinese government decided that well, maybe we don't want all our money going outbound and we're going to start putting restrictions on you. And I can tell you from the companies who are working with, we're seeing a very significant decrease in the flow of capital. It's not necessarily that all the money is going to go down to zero, but it does mean things become tougher, regulation issues, a lot of things that investment companies need to convince the government that this is a legitimate investment. And so the overall impact is something that we're already witnessing in the Israeli technology market. In terms of cyber war and cold war, so I think, you know, cyber war, I think we don't even need to discuss afterward. We've had this past weekend, it's been talked about a lot, but it is very worrisome. And in terms of the cold war, so I don't know if we can really understand whether, for example, it's Trump a friend of Putin or is it of false footing. You know, what is this whole thing of the new South Korea president that is starting to be nice with North Korea? What does that mean in a global situation? I think probably everybody in the room knows this chart, but I think what it tells us is that technology is definitely becoming much, much stronger than what it used to be, and people are starting to get aware of that. If we saw in 2006 one technology company, Microsoft, one of the first big estates in the world, and we had banks and other things, now we all know we have only technology companies. And I think one of those little things one may want to ask themselves is, in a few years from now, are we going to care more about who's going to be the next president of the United States, or are we going to care more about who's going to be the new CEO of Google? What is going to have more impact on our lives? In terms of the capital markets, we're not going to start doing analysis. I'll just say one thing: everything we, at least I, was taught in business school, economics, all kinds of analysis on what interest rates mean, I don't think we can actually use those anymore. And it's very tough to predict what's going on. And I tend to think some people are starting to buy gold as we speak. What does it mean to us in Israel? I'm rushing. One, keep developing great companies, keep course, do what we know how to do well. I do want to mention that opportunities should be grabbed. I think that one of those things, like the mobile acquisitions, and I'm expecting more of those to come. I think these are things that we shouldn't be worried about. You know, exits are okay, so we should grab opportunities. I do think we need to continue to be friends and to do business in a very good fashion with all the areas around the world. I don't think we know who's going to be better, who's going to be bigger, who's going to be more favorable towards the Israeli technology. So I think we have to continue, and I think most Israeli companies do that: develop three distinct markets where they sell into and never be dependent on one over the other. So my last slide before our interview is, I think you probably all heard this old Chinese saying, you know, you can look at the world with different eyes. We can look at everything I just told you in the presentation in terms of, oh my god, we have so many barriers, so many problems, so much uncertainty, or we can say these things are bringing us a lot of new opportunities. And I much like this: when the winds of change blow, some people build walls and other people build windmills. And with that, I would like to welcome a good friend, Mr. Phil Goodrich of BlackRock, for a short interview. Welcome.
Okay, anybody doesn't know BlackRock here? Okay, just a little bit of background because in terms of the numbers, it's an exciting company which I'm always amazed. So BlackRock Inc. is an American global investment management company based in New York, founded in 1988 initially as a risk management and fixed income institutional asset manager. And now BlackRock is the world's largest asset manager with, listen to this, 5.4 trillion dollars under management. Amazing number. BlackRock operates globally with 22 investment centers, 70 offices in 30 countries, and clients in 100 countries. A little bit about Phil Goodrich: he is Managing Director and Global Head of Technology and Enterprise Services for BlackRock. He's responsible for driving the firm's technology platform development, operations, real estate, and security. He's a member of BlackRock's Global Operating Committee. And all his brethren has been in the technology space. Thank you, Phil, for coming. Okay, ladies, I think he's watching. Okay, I'm fighting the story of the big fish in the pond that was the connection to early Hebbian because he's got the pescatarian diet, you know, so about that, it's only fish and other fish. That's BlackRock 9:1. No, no, just go to the next one. Okay, a little bit about your company. So you're very global. I have two questions. One, are you working as a global company which looks and feels the same around the world, or are you what we're calling these days glocal? Are your businesses around the world different? This is half of the first question. And the other one is, how do all the political or geopolitical changes affect your company?
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Phil Goodrich9:27
Okay, the first part of the question, I think, you know, I'm quoting Larry, my CEO here. He wants us to be Mexican in Mexico and he wants to be, you know, Israeli in Israel. And we are trying to be very local. And in fact, you know, we developed localism into something that is beyond food. And even in our touching field, in the things that we're doing with clients, we are going and we're trying to get this heavy accent on being local where we operate. It's related to the second part of the question. You know, all of the big companies, still a very short time ago, they were all becoming global companies. It's one big village. And right now the village is splitting. And who is not looking into different type of solutions nowadays when it comes to localization of data, when it comes to different type of operations, what are you allowed, what you're not allowed. And we're a company that basically we are running a lot of things for ourselves, but we're also running a lot of things for our clients. So we're also selling product, right? We're selling this Aladdin platform to our clients. And when you do that, it's also another spin to your geolocation. It's very important where do you keep your data center, how do you like this platform, what are you doing with the data, how do you move the data. And this has a very much impact on everything that we're doing.
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Yifat Oron11:21
Thank you, very interesting. So you're in charge of technology. How important is technology in this huge business? And if it is important, what are you specifically interested in?
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Phil Goodrich11:36
Well, you know, one of the company with technology in offense, and it's interesting, right? So my background is coming from, I was CTO for HP, so I was running a lot of financial companies, a lot of company strategy, never barely touched BlackRock towards the end of my career. And it's very interesting, but the company with so much technology in offense, we care about it very much. You know, our platform, it's one platform for everything that we're doing. You're going to have the same taste on the way that you do trading, with the same touch that the nature will touch people in the firm, literally. And you know, because we are a technology company and we're running technology platforms and we're enabling some of the largest firms in the world to have a whole ecosystem of financial technology. And only for that part that it's running clients for us, if you're going to look at the numbers, doesn't matter how you look at it, we have the largest clean tech in the world also by size. So we are interested in a lot of things. So my interests right now, certainly, you know, we are in this period right now like the Victorians in the 1830s. You know, everybody used to be scared by the engine, the iron horse is going to replace not only the horses, it's going to replace all of us. Right now we have this dialogue with machine learning, artificial intelligence into everything. How much this is real, how much this is not real, how much really do you have artificial intelligence behind what you are doing? Very much interested. For us, very interested in the area of quantum computing because of all kinds of reasons, starting from actual compute power, but also what this can do and how this can disrupt financial markets. Very interested in everything bots. So I'm running these things, bots everywhere. And you know, certainly a lot of people are clearly talking about it. And you know, we are not having robots making investments for us today, and it's not going to happen very soon. But certainly, you know, when you see what's going on today with bots, and I'm not talking about robotic technology that is basically people they used to have scripts and right now they call the script that used to do something a bot. I'm talking about real robotics can do a lot of good stuff for us. Also, I believe that a man-machine collaboration can do better results in investing, can do better results in technology, and that's where we're working on. And certainly, this area of RPA, robotic process automation, it's very early. A lot of talk, a lot of noise about it, but it is very early. It can do a lot of things, but if you take the story of digital transformation and one of the lessons learned for digital transformation, it is to take things that work and replicate them for what they work and not to reinvent, not to push them. You can get a lot of good news out there.
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Yifat Oron15:07
Are you working with startups? Sorry, everything is in-house?
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Phil Goodrich15:14
Well, we're famous for cooking all these things ourselves, and we do not typically push towards incubation and stuff. So our disruption comes through a few directions. Certainly, we're launching a huge hackathon in-house with about 500 teams this year of hackathons. And some of the things that are coming out of it, you know, our wealth advisory technology capability came from a hackathon idea that did not win two years ago. And right now we're providing that for ourselves and for a lot of our customers. And you know, we use startups a lot in pilots, but because certainly with what we're selling, a lot of it is risk, we are trying to stay as much risk-free as we can. But there is no way to learn without startups. So we are running quite a lot of POCs in a year in all kinds of areas, starting from, I don't know, cybersecurity through core technology to data analytics behind whatever. And we are learning from this process all the time.
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Yifat Oron16:31
Great. For those of you who don't know, you've just opened an office in Israel. It's a big, big, big thing. Let's talk a little bit about what you're interested in in terms of technology in Israel. Is there a special interest in Israeli tech business?
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Phil Goodrich16:51
Certainly, you know, our co-president that passed away, Charles Halak, he was Israeli. And he asked me to take a delegation from BlackRock and take it to Israel and start making things happen there for us. And I just did that. And with the help of our Israeli manager there, we finally opened this office. Look, I grew up there and I was educated. I think the best education systems in Israel, they are in the military, no doubt about it. You know, I'm an outcome of the IAF, very proud for that. And there are so many other great schools there. When you have this kind of people that they are growing this way, it's the best place to innovate in the world, I have no doubt about it. And because we are going, you spoke about geopolitics, I think that right now a lot of companies, they will change their topology and they will go and enable innovation at the edges. And they are going, right now it's kind of philosophy that is enabled right now because of capabilities of RESTful API to integrate companies. So things are going to get pushed to the edges more. Squads are going to come that they are multidisciplinary, and Israel is a fantastic place to run technology this way.
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Yifat Oron18:15
Unfortunately, the time is up, but I have to ask you one question: what keeps you up at night?
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Phil Goodrich18:26
You know, running the platform that is there, I don't know, in the amount of platform, the size of platform that we're running, certainly it keeps me up at night, literally. You know, it's about the cyber act, the cyber security that happens all the time. You mentioned the last weekend. I assume a lot of people in this crowd, they spent some time over the last weekend to make sure that they are okay. And that's not the only thing, so it's all the time. But to be able to run a platform the way that we are running and to get the trust from some of the smartest companies on the face of earth as our clients, we need to keep up our game all the time. So you never sleep? No, I do, I do, but they are, yeah, like, okay.
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Yifat Oron19:17
Thank you very much. Thank you.