Bank-to-bank transition reform – the supervision of banks updates one year after the launch of the reform About 96,000 requests to switch from bank to bank have been submitted since September 2021, when in practice, as of the end of September 2022, about 67,000 customers have switched banks through the online system | This is in addition to transitions not using the | system In the first half of 2022, approximately 125,000 customers closed current accounts
Shay Klein 06.12.2022
In September 2021, under the leadership of the Bank of Israel and the Ministry of Finance, a reform to the amendment to the Banking Law came into effect – which required the banking system to allow bank customers to switch from bank to bank, in an easy, fast, safe and free of charge manner.
The promotion of the reform required a complete commitment on the part of the banks and credit card companies to find a suitable technological solution (online system), through the company MSAB, which led to the fact that today the bank’s customers can transfer most of their financial activities – which includes the transfer of right and obligation balances, standing orders, debit authorizations Account, credit card charges, securities, checks and more – from one bank account to another bank account, in a synchronized way and in a friendly and fast way. Also, the reform implemented an innovative solution of a “follow me” service in the transfer of activity between banks, which significantly improves the transition experience, since as a result, any debit or credit that reaches the old account is automatically routed to the new account. In this way, the customer is also spared the hassle that would have involved having to deal with debits and credits returned by the “closed account” party and contacting those entities to update the details of the new bank account.
One year after the launch of the reform, the Banking Supervision publishes additional information about the bank-to-bank transition reform, including: data received while using the online system; Control actions carried out by the supervision of banks and the findings of a customer satisfaction survey carried out one year after the launch of the system.
The total number of applications submitted in the online system and the total number of applications actually completed – From the launch of the online system until 30.11.22, a total of approximately 96,000 requests were submitted to switch from bank to bank, when in practice approximately 67,000 customers switched banks using the online system. In addition to switches using the online system, there are switches between banks that are carried out not using the online system, Following the closing of accounts, when in the first half of 2022, approximately 125,000 Customers closed current accounts.
Customer-initiated mobility cancellation – Of the approximately 28,000 mobility requests that were submitted but not actually completed (as of 9/30/22) – 35% were canceled at the customer’s initiative. These cancellations resulted mainly from the banks’ retention actions and proposals to improve the account management conditions that led the customers to cancel the transfer request on their own initiative.
Main reasons for canceling mobility at the initiative of the banks – With reference to the 65% of the requests for mobility that were canceled at the initiative of the banks, about 47% of them were rejected for various technical reasons (such as no identity of the owner, the account number does not exist or the account is inactive, etc.), about 38% more were rejected because the customer did not settle the His obligations at the bank that he wishes to leave and about 11% more are cases where there is a legal impediment or complexity to carrying out the roaming through the online system.
“Follow me” service (routing in the online system) – As part of the “Follow me” service, which enables the routing of debits and credits (hereinafter – transactions) automatically after the transfer of activity, from the old bank to the new bank, about 1,000,000 transactions were made, of which about 425,000 credits were automatically transferred (salaries, money transfers, etc.) b), approximately 540,000 charges (bank credit card charges, account debit instructions, etc.) and approximately 37,000 checks. It should be noted that the automatic routing of transactions, which is mostly carried out successfully and without problems, constitutes a solution to the significant barrier that existed between the banks before the launch of the online system, in that the customers were required to contact the various beneficiaries to update them on the details of the new bank.