The Supervisor of Banks today submitted to the Knesset’s Economics Committee the The periodic report for the first half of 2021 on the prices of common banking services for households. The report is based on the reporting of banking corporations and credit card companies on fees charged during the first half of 2021.
During the first half of 2021, the downward trend in the ratio of total commission income to the assets of the banking system continued. This declining trend began after the reform in 2008, and to date there has been a cumulative decline of about 45%. This decrease is attributed, among other things, to the cumulative complex of supervisory actions on various commission issues in recent years. The decline in the first half of 2021 continues this trend, but is also largely affected by the corona virus crisis which continued to give its signals in economic activity and households during this period.
The majority of the amount paid by the public, individuals and small businesses, on banking fees derives from securities activity (33%), followed by fees for managing a checking account (19%), credit (16%) and debit cards (16%).
The average cost of managing the current account and holding debit cards to the account in the first half of 2021 increased by about 6% compared to the average cost in 2020 and stands at NIS 23.8 per month, and decreased by 11.5% compared to the cost in 2019, before the corona period. About 26.9 NIS. This cost consists of:
The cost of running the current account amounted to NIS 10.7, a decrease of about 5.5% compared to 2020, which is mainly due to a decrease of about 35% in the number of actions to return a charge due to a “there is not enough coverage” party. In addition, the trend of switching to digital operations has continued, which also contributes to lowering costs. In the last decade, the cost of running the current account has decreased by about 47%.
The cost of debit cards amounted to NIS 13.1, an increase of about 18% compared to 2020. The increase was mainly due to an increase in income from commissions on transactions and withdrawals in foreign currency, due to the return of the economy to a certain routine compared with the corresponding period last year when the corona crisis broke out.
The Supervisor of Banks, Mr. Yair Avidan, said when the report was published, “I reiterate my call on the public to make use of direct channels and digital means and examine the feasibility of servicing the routes for them, thus saving costs. In doing so, the regulator takes care in a variety of ways for populations that may find it difficult to operate the same direct means, in order to maintain a high level of service for them as well. I also call on the public to compare the quality and cost of services between the various banks, including using the “Bank ID” report that is expected to be presented to customers on the banks’ websites on February 28.
“It is also worth noting that a few months ago, the system was launched that allows customers to move easily and conveniently, which has been monitored for a long time. The system is now available to customers and can help promote competition and the well-being of the banking consumer. “In these days when the Corona virus crisis is still giving its signals, I call on the banking system to be more sensitive, especially in dealing with consumer issues that are at the heart of public sensitivity, such as the prices of banking services.”
The Bank of Israel stated that the period of this report was characterized by high uncertainty which affected the banking activity of the public. During this period the corona crisis continued and there was a third closure until March 2021, which led to a significant change in the public life routine. In addition, Operation Wall Guard took place in May 2021, affecting large areas of the country. The ever-changing reality has affected the consumption of public services, as reflected in this report.