Israeli banks are trailing far behind the Internet online services revolution. Chiefly responsible for this state of affairs is Bank of Israel, which takes a conservative, not to say suspicious, view of this innovation. Last December, Israeli banks were finally given permission to establish some very basic services, mainly enabling customers to examine their current accounts and credit card accounts. Today, some sites are updated to the preceding business day, while Bank Leumi updates accounts in real time. Actual transactions, for the present, are excluded.
"This resembles the gradual deregulation of foreign currency", says Bank of Israel spokesperson Gabby Fishman. "The idea is to create a long-term strategy. In case of the Internet, a balance must be struck between the customer’s interest and information security". Fishman says Bank of Israel does not set security standards, and that the reason for the long drawn out process is not is not that the security aspect has to be individually examined in each bank, but that a comprehensive approval in principle needs to be given. Fishman declined to name a target date for issuing the permit. "It is best", he concluded, "that more experience be garnered".
The banks also labour under whole slew of restrictions imposed by Bank of Israel, that starkly contrast with the well-known ease of use of the Internet, also running counter to the whole notion of accessibility that characterises the medium. Take, for example, the actual hook-up to the service. The directives issued by the Examiner of Banks provide that one must go to the bank, ask for the relevant forms, and then, if you have been known to the bank for at least a year, you are permitted to return a few days later and be given your personal password.
The other complications are engineered by the banks. Bank Leumi customers, for example, have to install a software program to operate the system. The bank cites security precautions. But a non-representative sampling of three customers, all of them highly adept in the use of PCs in general and the Internet in particular, say the software repeatedly causes the computer to crash, and that they also encountered connectivity problems. "It was quite nice once I succeeded" said Ron Faur, interviewed by "Globes". Bank Leumi was the only bank that refused to divulge the number of customers using this service. "A few thousand", said the spokesperson’s office, adding that they were unaware of any problems in installing the software.
Bank Hapoalim customers too report access problems, with the network sometimes down for whole days. Customer Michal Hillel says she had a simple technical problem, but the support centre didn’t understand what she was talking about. In the case of Bank Hapoalim, no software needs to be installed. This greatly simplifies the process, as any browser can be used to access the service. "The great advantage is that when my credit card was stolen, I was immediately able to see that it had been used and to notify the bank. On the whole its nice, but not more than that", Hillel said. Bank Hapoalim says it has "more than ten thousand" service users.
"By and large I am quite satisfied, but it could be much more convenient", says Avigail Burstein, a customer of First International Bank. The files, she says, are heavyweight ones, and the lighter version also downloads quite slowly. On the whole, she says, the service is very convenient to use, but there are Hebrew language problems. She was asked to change her password after using the service for one month, and was glad to know, she said, that the bank is concerning itself with security. First International report 7,000 service users.
Mizrahi Bank customers can perform a thirty day retroactive check of their bank accounts. At Bank Hapoalim, by contrast, information cannot be accessed more than ten days back. The site also facilitates English language access, meaning that it can be viewed from anywhere in the world, even from a PC not fitted with Hebrew fonts. No software need be installed. The bank says it has 3,000 users.
Discount Bank maintain that 5,000 customers are already using their Internet service. The customer must download their software, which is not amenable to all browsers. "I like their idea", says customer Guy Rubio, "their customer service is quite good, but the program still doesn’t operate smoothly, it takes a long time to connect and the server may sometimes be down".
With the exception of Discount Bank, most banks maintain that they are fully prepared to provide Internet transacting service, and are only awaiting the permission of Bank of Israel. Meanwhile, they complain that regulations are not being enacted to keep pace with the technology. If the non-representative customer sampling is to be believed, the technology too could stand some more working on.
Published by Israel's Business Arena June 17, 1998