One of the last obstacles to switching between banks with a click is removed yesterday, following the approval of the Bank Transfer Act between banks. Knesset members approved a check clearing law, which allows customers to switch between banks without replacing the old checks with new ones.
Were it not for the approval of the law, the banking mobility reform that would take effect in September this year, would have been delayed. In recent weeks, there have been question marks over whether the law will be approved, in light of the dissolution of the government and the dissolution of the Knesset. This was the last hurdle to embarking on a customer mobility reform. Customers who want to move to a new bank will only have to give a transfer order to the new bank and all their banking activities will be transferred with them from the existing bank automatically. These include salaries, credit cards, standing orders, checks, foreign currency and the securities portfolio.
According to data from the Bank of Israel, as of today, only 2.5% of the banks’ customers make transfers between banks every year. The main barrier that has prevented this to date has been the fear of the awkwardness of transferring all activity to the new bank. The removal of the barrier will encourage competition in the banking system, mainly on the part of the digital bank.
The Digital Bank, owned by Prof. Amnon Shashua and managed by Gal Bar-De’a, received a license from the Bank of Israel in September 2019. Roi Katzir, VP of Marketing and Sales at First Digital Bank: “Customers who want a competitive alternative without messing with bureaucracy are welcome to join us. The Israeli public is used to thinking that moving banks is complicated, but even today the reality is completely different, it is even really easy and with the reform it will be even easier. “
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