Where convention meets innovation — the bank

Innovations at the branch 

It seems that the bank branches are always crowded. This may be due to the fact that many Israelis are (relatively) new immigrants — mainly from the former Soviet Union and Ethiopia — and have little or no experience with modern banks. They may be fearful of new technology, especially when it is connected to their money and savings. Or it could be that there are just not that many branches (as opposed to ubiquitous ATMs). In many medium-sized Israeli cities, the larger commercial banks often only open one branch. 

Niva Lanir, communications advisor of the Association of Banks in Israel, notes that the banks have taken some very important steps to attract new arrivals. “In recent years,” she says, “due to immigration and the competition to get customers, the banks are appealing to the immigrant population at a very basic level. They offer explanations and information in different languages. Even at the ATM, it’s possible to make a transaction in a number of different languages [Hebrew, Russian, or English].” 

Diversity fosters imagination. The banks have adapted their usual investment channels to meet needs of a customer base that includes both the newly landed immigrant and the savvy high-tech entrepreneur and everyone in between. Sometimes, through special investment or savings programs, the banks have managed to re-educate and encourage their more reluctant customers. Banks promote heavily through advertising on TV, fliers in the branches, and ads in the newspapers. And the larger banks commonly promote their services in the country's various Russian-language print and broadcast media. 

The automated future

To shorten the lines and improve the service, Israeli banks are now investing heavily in automation. They have installed more ATMs (there are 3,700 scattered around the country) and are making to move to "vestibule banking," small storefront or shopping mall locations with computer terminals where customers can conduct all their transactions without actually entering a bank or encountering a teller. 

Innovations online 

For several years the banks have offered banking services over the Internet. Unlike their counterparts who stand in line as part of the banking “experience,” Internet customers don’t even want to see the inside of the bank. Accessed via the banks’ websites, bank customers can perform a wide range of transactions — from transferring money to opening savings accounts. 

The banks have invested a great deal of resources on securing these sites. In fact, the secure sites offered by the Israeli banks rank as among the most secure in the world, yet many customers still do not feel comfortable using the Internet for their banking activities. 

According to Internet World Stats (http://www.internetworldstats.com) there are 3,040,000 Internet users in Israel (as of March 2005), but only 350,000 of them use the Internet to conduct their banking transactions. Among the reason for the low numbers: lack of trust in the site security, lack of confidence about conducting banking business over the Web, and lack of confidence in computer or Internet skills. 

So it could just be that in a country of immigrants, the country's banks are a real gathering place. 
  
According to the Bank of Israel’s list of “Authorized Banking Corporations,” the country has 23 commercial banks, 2 merchant banks, 8 mortgage banks, and 6 financial institutions