Minister of Finance Moshe Kahlon: “The big announcement we are making today, together with the Bank of Israel, is the transfer from one bank to another within a week without bureaucracy and without difficulty. This is the biggest impediment for people who want to switch banks. People today do not switch banks, because they then have to chase after standing orders and electricity bills. Even by mobile, as soon as we legislated that companies must move the customer with his number, we saw a tremendous flow, and people switched from one company to another. The public has waited for such processes for 40 years. I am pleased with the cooperation with the Supervisor of Banks and the Governor. We are continuing to work hand-in-hand to promote competition.”
Bank of Israel Governor Dr. Karnit Flug: “I am pleased that the Bank of Israel and the Ministry of Finance are taking these steps together. Structural reforms in the financial field that are made together and with agreement by the Bank of Israel and the Ministry of Finance have a better chance of success and implementation, and I therefore welcome this.”
Minister of Finance Moshe Kahlon and Bank of Israel Governor Dr. Karnit Flug today announced a three-part program to increase competition in the banking system.
The program consists of three processes:
· Mobility between banks “at the press of a button”.
· The consumer can easily compare costs of his personal financial products.
· Leniencies for new banks by helping to establish an office for computerized banking services.
Mobility between banks “at the press of a button”
Establishing a system for transitioning between banks that will provide the customer with a simple and easy transition between banks. The process is expected to make the bureaucratic steps necessary to transfer a bank account even simpler, and to significantly increase competition between the various banks.
Currently, a customer interested in switching between banks must take many actions vis-à-vis the new bank, the old bank, and various other parties that debit or credit his account through standing bank orders, such as the electric company, cellular providers, the National Insurance Institute, employers, and more. Following the implementation of the reform, all transactions from the old account will automatically be moved to the new one.
Comparing prices of personal financial products
The customer can compare prices through an objective party in accordance with the nature of his personal banking activity. The banks will be required to share the customer’s information, with his agreement and in a secured manner, with supervised bodies that will present him with the most worthwhile offer.
Leniencies for new banks by helping to establish an office for computerized banking services
To help increase competition in the banking market, the Ministry of Finance will help establish a new central computerization office that will make it easier for new banks to deal with the entry barriers that currently exist. The Ministry of Finance will allocate NIS 200 million for this process.