Market Trends of Israel Cybersecurity Industry
This section covers the major market trends shaping the Israel Cybersecurity Market according to our research experts:
Cloud Security to Dominate the Market
The shift of workplaces to the cloud as a part of the work-from-home and hybrid working policies after the COVID-19 pandemic increased companies' emphasis on cloud security. The ease of cloud computing requires end-to-end security, creating considerable demand for cloud security solutions in Israel.
Companies opt for strategic moves to strengthen their cloud security portfolio in Israel with the help of local cloud security companies. In January 2022, Google acquired Siemplify, an Israel-based cybersecurity start-up, to include security orchestration, automation, and response (SOAR) in its Google Cloud security portfolio. This helps augment its Chronicle security analytics platform and make its security nearly invisible for the required applications.
Further, the service providers continue to take the required measures to strengthen their headcount to tackle the high cloud security demand. In February 2022, Radware Ltd announced plans to grow its innovation center in India and expand its cloud network footprint, cap, capacity, and services division, including its technology, operations, and headcount. Such measures help the companies maintain a significant headcount at the Israeli and global levels for better cybersecurity services and accuracy.
Similarly, the partnerships shape the market landscape, with companies sharing mutual benefits and a more substantial product portfolio from the strategic alliances. In July 2022, Delinea and Authorize announced a joint strategic partnership to sell their products. The robust solution provides consistent privileged access security across multiple cloud infrastructures and SaaS applications through a Zero Trust approach combined with available integrations.
As several companies like e-commerce platforms provide services through cloud computing, the services make cloud security necessary. The increasing popularity of such PaaS and SaaS solutions in Israel is creating a significant demand for cloud security solutions at a vast scale.
BFSI to Contribute Significantly to Market Growth
The modern BFSI system and digitalization of payments have always been vulnerable to cyber crimes and fraud. Stringent measures by the fintech players in Israel are crucial for fintech and BFSI service providers. The increasing number of fintech players in Israel, with more banks opting for inline services, generates significant demand in Israel for companies to provide payment security solutions in the market.
The government continues to strengthen the strategic bond with partners for the BFSI sector through alliances for mutual support, bolstering the industry's overall growth. In August 2022, the Israeli Ministry of Finance and the US Department of the Treasury signed the first agreement for cyber-financial cooperation. The deal would strengthen the long-standing relationship and collaboration between the two nations. Further, the agreement included sharing cyber financial information, including cybersecurity, threats, and work methodologies to strengthen the solidity of the financial systems.
Also, several new partnerships promote safe banking over the internet and shape the industry, creating demand for specialized applications of cybersecurity solutions. In September 2022, Tata Consultancy Services (TCS) announced that Israel's OFEK Credit Union (OFEK) had selected TCS' Banking Services Bureau (BSB), powered by TCS BaNCS, to achieve its growth and transformation goals. OFEK chose TCS' BSB to quickly launch its operations and offer innovative and contextual digital banking services. TCS BaNCS' market-ready banking and securities solution and diverse set of APIs delivered on a SaaS model would help OFEK connect to and integrate with the market ecosystem, building a vibrant and comprehensive digital financial offering for its customers.
Further, several innovative projects are shaping the market, with active associations trying to simplify banking for different end users. In June 2022, the BIS Innovation Hub, the Bank of Israel, and the Hong Kong Monetary Authority joined forces to test the feasibility of a cyber-secure two-tier retail CBDC. In the proposed model, the arbitrators have no financial exposure resulting from their customers' onboarding, holding, or transferring CBDC, reducing the risk and costs associated with financial intermediation. The Innovation Hub's Hong Kong Centre led the project, which was planned to kick off in the third quarter of 2022 to publish its findings by the end of the year.
Thus, the cybersecurity market in Israel is highly dynamic for BFSI implementations. With the increasing number of users and online transactions, securing electronic banking and trading is necessary for Israel. More service providers are actively introducing services at both general and enterprise levels to facilitate the secure integration of cybersecurity products with their systems, products, and services.
