Fintech To Disrupt Israel’s Banks

One Zero stands out as an exclusively digital but nonetheless fully licensed bank.

Amnon Shashua.

With no new entrants in nearly half a century, the Israeli banking system is ripe for disruption; and its regulator just unleashed a new catalyst. In January, the Bank of Israel gave final regulatory approval for a full banking license to One Zero Digital Bank, making it Israel’s first new bank in four decades.

Israel is no slouch when it comes to technological innovation—it is among the top 20 countries for patents granted in 2020, for example. That includes its banks, which have embraced the digital future. Still, competition has been limited; and this new license can spur competition and innovation, according to the regulator.

One Zero stands out as exclusively digital, not a brick-and-mortar outbuilding, and also as a rare fintech with full bank status. Its origins suggest it may bring fresh thinking. The bank is controlled by Amnon Shashua, who co-founded the autonomous car business Mobileye, which was later acquired by Intel in 2017. One Zero is chaired by Shuki Oren, a former accountant general of Israel.

Shashua, a professor of computer science at Hebrew University, revolutionized the mobility sector with Mobileye by accelerating development of technologies behind monitoring roadside assets, pavement conditions and other such information.

He aims to bring the same data-driven approach to banking. Under his vision, One Zero is using artificial intelligence and other technologies to provide a hybrid human-tech customized service that offers digital financial services based on each customer’s unique profile and behavior, while providing the human touch as needed. The approach aims to be faster and simpler for customers while also more financially competitive for the bank.

One Zero Digital Bank proved its technological feasibility in a 2019 pilot under a restricted license and planned a soft launch for early 2022 as it sought to meet the capital requirement for licensing. In December, the bank announced it had met the mandate with $120 million on a valuation of $320 million. The backers are a truly global group that includes Swiss wealth management specialist Julius Baer and Japanese financial group SBI, among others.