"We won't be a free bank but we'll disrupt the existing order"
Chairman of the First Digital Bank, Shuki Oren, said that it will launch its services towards the end of this year or in the first quarter of next year with the aim of making an immediate footprint
The First Digital Bank, controlled by veteran entrepreneur Amnon Shashua, is ready to launch at the end of this year or in the first quarter of next year, bank chairman Shuki Oren said on Monday during Calcalist's FinTech 2021 Conference. The bank has been running a pilot with several hundreds of clients since March and the results have been positive, according to Oren.
"The pilot includes regular checking account activity, loans, and debit and credit cards. Of course, in a new system like this there are some bugs, but it is working well," said Oren. "We only received our banking license in 2019 and we committed to embarking on a pilot already in March 2021. We achieved that despite the great challenge we faced having to do so during the Covid-19 pandemic."
Chairman of the First Digital Bank Shuki Oren. Photo: Yariv Katz
Every bank has its own app these days and most banking activity is done online. What will the digital bank do differently?
"Ultimately, clients no longer go to bank branches, but they are paying high commissions in order to sustain these branches. The banking system is inefficient when it comes to manpower. When you set up a new body it makes sense that it will be more efficient and will have lower overheads that will ultimately benefit the clients."
Will you offer lower commissions than the other banks?
"We will not be a free bank as providing free services means that I'm planning on selling my client or his information, which is something that I don't want to do. But we will be cheaper than the existing banks, which the public is unaware of how expensive they currently are. Why is Amnon Shashua founding a bank? Shashua wants to create change that disrupts the current order. We saw that in other companies in which he was involved like Mobileye and OrCam."
The digital bank is the first new bank to be established in Israel in 43 years. Three years ago Check Point co-founder Marius Nacht first launched the digital bank project, but resigned from the initiative in May of last year, leaving Shashua as the controlling shareholder. Shashua at the time pledged to inject $60 million in equity into the bank.
The Digital Bank already has a banking license to operate in Israel, and today employs 150 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 its planned operations in the venture capital market.
"We want to provide a wide range of services that will include a more significant involvement for clients," said Oren. "We don't want to make money off the ignorance of clients. We will actively analyze accounts and highlight future problems they could have due to large expenses or being in an overdraft. We will help clients manage their money better. We can save people a lot of money by helping them manage their accounts better."