Although the majority of Israelis still view the banking system as monopolistic at worst, oligopolistic at best, The Bank of Israel really does try to create an illusion of competition between the banks.
Different moves have included prevented the take-overs of smaller banks, assisting in changing over standard orders and taking the pension funds and certain capital market activities out of bank hands.
The latest invention is the Bank I.D card – known as the “Teudat Zeut Bankai”. This is a full run down of accounts and activities to be provided by each bank to the customer on the 28th of February, in order to allow easy comparison between banks’ charges, interest rates and credit ratings.
Is this document of value or should it be discarded like most of the surplus paperwork there banking system insists on supplying its consumers?
For customers who have one bank account, like the majority of the country, apart from cause frustration about the amount the bank charges, there is little to be gained by studying this report. People are unlikely to compare between friends or post this to Facebook to get shares, likes and comments. If you run more than one account, then by all means, compare and contrast. It is even worth going into the more expensive bank to ask reduce fees, but I fear the response will be more frustration and few will actually follow through.
This report does provide, however, a useful vessel for any customers who are credit-consumers. The majority of banks have recently instigated credit scores for their customers. These are based on algorithms which rely on very routine criteria. Part of these criteria are on the running of the account; this is fairly generic. There is however an emphasis on the constancy of income. Olim, especially those earning abroad, are generally being penalized for having overseas income, regardless of its volume.
Although this discrimination seems unfair it is unlikely to be amended, because this small group of people is not worth the effort of reprogramming the system. However, the consumers score is low due to this prejudice, it affects not just the interest rate but the ability to secure loans and mortgages in the future. Every bank has a committee which receives appeals of this kind; it may definitely be worth voicing your case.
These moves on the part of the banking regulator are welcome in theory, albeit in practice, they do little to encourage real competition. The only real way to change the banking system is by allowing overseas banks to make a real entry into the retail banking and financial markets. The one thing which is most effective at scaring away these potential saviors is the regulator itself.
The writer, Matti Munk, is founder of Western Wall Street