Another step in enhancing competition in the financial system: Portfolio managers will be able to carry out transactions in customers’ accounts digitally
a. Bank customers will be able to appoint portfolio managers online for their accounts, either human or automated (Robo Advising), without having to travel to the bank branch.
b. A customer will be able to appoint a portfolio manager online, from either a bank or nonbank entity, such as investment houses or fintech companies dealing in robo advising.
c. The portfolio manager will be able to carry out transactions in an online account.
d. The leniencies provide a basis to serve as a platform to promote competition in the portfolio management services, for the benefit of customers.
Due to the technological advancement in the area of remote identification and authentication of customers, and pursuant to the leniencies granted by the Banking Supervision Department in the process of opening an online account, the amendments serve as an additional significant step toward customers being able to conduct full banking activity remotely, without having to travel to the branch. The amendments enable a customer to appoint, online, a portfolio manager, in an account opened online as well. Signing the relevant documents to grant power of attorney will be carried out in a real time direct visual interaction with a bank representative, in a manner that will make it possible for the customers to receive all the explanations they require on the issue.
The amendments will allow the opening of banking activity to nonbank entities as well, and thus promote competition in portfolio management services.
The Supervisor of Banks, Dr. Hedva Ber, said, “The Banking Supervision Department defined as one of its goals the support for enhancing innovation and technology in the banking system in order to improve the service to customers and increase competition. The steps we announced today are part of the removal of barriers by the Banking Supervision Department with the purpose of allowing the expansion of digital banking activity, and they will support the enhancement of competition in the area of portfolio management, the reduction of the cost of services, and the improvement of convenience for customers in utilizing such services.”