Israel’s first digital bank targets mid-2021 launch

Israel’s first digital bank expects to commence operations in mid-2021, the company said on Sunday, after completing the hiring of its senior management team and signing a contract for the development of the bank’s infrastructure.

Controlled by two leading Israeli entrepreneurs, Check Point Software co-founder Marius Nacht and Mobileye founder Prof. Amnon Shashua, the digital bank will be headed by CEO Gal Bar Dea, one of the founders of Leumi Group’s Pepper banking platform. The chairman of the new bank will be former Finance Ministry accountant-general Shouky Oren.

In September 2019, the Bank of Israel announced that it had authorized Nacht and Shashua to establish the new bank – the first banking license granted in over four decades. The authorization follows a string of reforms carried out by the central bank in recent years to reduce entry barriers into the industry.

The digital bank said it informed the Finance Ministry and Bank of Israel last week that it had finalized a contract with Tata Consultancy Services (TCS), a subsidiary of the Mumbai-headquartered Tata Group, to develop and implement the bank’s technology infrastructure.

The project will begin the coming weeks, the bank said, involving hundreds of software programmers and developers in Israel and abroad. The bank also plans to hire dozens of new employees by the end of the year.

“Today we have achieved another key milestone on our way to establishing Israel’s first independent digital bank,” said Bar Dea.

“We welcome the agreement with TCS and thank our shareholders, the Banking Supervision and the Ministry of Finance for their support and direction. We have hired an experienced founding team that is committed to the task.

“All of them have extensive and significant banking, finance and technology experience, and all have tremendous drive to contribute to advancing banking in Israel through the establishment of the first independent digital bank in Israel.”

As approved by the Bank of Israel, the bank’s equity stands at $120 million. Half of the funding was invested by controlling shareholders Nacht and Shashua in equal parts, and the remainder will be raised from private investors in Israel and overseas.

Nacht, one of Israel’s leading entrepreneurs and investors, made his fortune as co-founder of cybersecurity company Check Point. He is also the co-founder of and anchor investor in leading healthcare and life sciences innovation venture-capital firm aMoon.

Computer vision expert Shashua is the president and CEO of Jerusalem-based Mobileye. In 2017, the dominant vision technology company was acquired for $15.3 billion by Intel Corporation, where Shashua serves as senior vice president.

“I am positive that the vision of the new Digital Bank – a new era in Israeli banking, where the power shifts to consumers, with possibilities for comprehensive end-to-end digital innovation – along with the global power of TCS and the proven ability of TCS Israel in rapid development of advanced banking IT systems will hail a consumer revolution in banking and finance in Israel,” said TCS Israel CEO Eyal Moskal.

Like existing banks, the digital bank will be monitored by the BoI’s Supervisor of Banks, which aims to ensure financial stability and the safeguarding of depositors’ funds. The new bank will have access to all of the Bank of Israel’s liquidity instruments, including monetary loans and deposits.