Amnon Shashua’s Digital Bank initiates operations in pilot mode
The program will be expanded during the third quarter of 2021, and be available to the general public by the end of the year
16:1114.03.21
The Digital Bank owned by Prof. Amnon Shashua, the CEO of Mobileye, announced on Sunday that it will be launching its banking services pilot program, making it the first new bank to be established in Israel in 43 years.
Mobileye CEO Amnon Shashua. Photo: Bloomberg
Three years ago Check Point co-founder Marius Nacht first launched the digital bank project, but resigned from the initiative in May, leaving Shashua as the controlling shareholder. Shashua at the time pledged to inject $60 million in equity into the bank.
Mobileye CEO Amnon Shashua. Photo: Bloomberg The Digital Bank already has a banking license to operate in Israel, and today employs 140 people. The bank has also signed an agreement to issue credit cards with Isracard and has registered as a trading partner on the Tel Aviv Stock Exchange in preparation for operations that it plans to launch in the venture capital market.
The pilot program will include hundreds of participants, and will be expanded by an additional thousand people during the third quarter. It will open to the broader public by the end of the year. At this stage, the pilot includes basic bankings services and in the future it plans to also launch securities operations.
The Digital Bank believes it brings additional value to the market as its technologies are based on artificial intelligence, and rests on Shashua’s background in other such initiatives namely in the automotive industry, with Mobileye, and in the medical device sector with Orcam, which provides solutions for those with vision impairment.
“The AI revolution is already here, and is now coming to the banking sector too. The banking system is hungry for innovation and competition after years of stagnancy. We built a breakthrough technology that can be adapted to the global market as well,” Shashua relayed.
Digital banks have a challenge: despite the negative sentiments against banks, transfer rates between banks is very low, and is estimated to be around 4% a year. A new system that enables customers to transition smoothly between banks, is set to be launched in September, and could increase the transition rate.
Today, there is one digital bank in Israel, Bank Leumi’s Pepper. Leumi has noted that Pepper has been a great success so far, although sources in the banking system said they don't feel as if it has truly shocked the market. The Digital Bank emphasizes that despite the fact that a digital bank already operates in Israel, they are still providing significant value since their company doesn’t belong to any of the traditional banking groups and incorporates top-notch technology and innovation.
“Netflix killed Blockbuster, Spotify disrupted the music industry, and Tesla left Ford and Mitsubishi in the dust. The banking industry is one of the few that still hasn’t undergone a revolution. Large and old brands that control the market with little competition all offer exactly the same products,” Gal Bar-Dea, the Digital Bank’s CEO said.
