Supervisor of Banks Dr. Hedva Ber delivered a speech today at the Globes Israel Business Conference.
  The following are the main points of her remarks:


·    The streamlining programs formulated by the banks are significant, and will lead to a 12 percent reduction in the banking system’s workforce.

·     The fruits of this streamlining will reach consumers.

Streamlining in the banking system is essential in order to lower the cost of service to the public and in order to ensure that the banking system remains resilient in the face of future changes and that it can adjust to a technological and competitive world.


A year ago, we instructed the banks to formulate significant streamlining programs and to reduce the gap in the efficiency indices vis-à-vis the other OECD countries.  We allowed the banks to spread the cost of the streamlining programs and to implement them without negatively affecting their ability to meet capital adequacy requirements.  The concept that led this process was that inefficiency in the banks “rolls over” to their customers and shareholders who, for the most part, are the broad public through the pension, provident and advanced training funds.  The programs served a double purpose: to lead to a situation where the public would enjoy services at lower cost and greater convenience, as well as higher dividends; and so that the banking system would bring itself in line with the new competitive-technological environment taking hold.


The banks set out significant streamlining programs for the years 2016–2020, which would lead to significant savings of more than one billion shekels each year at the end of the programs’ implementation.  The savings would be directed toward technological improvements, from which the banks’ customers would benefit in the form of greater convenience in their interface with the bank; increased dividends, which would benefit the public through its pension savings; and reduced costs.  For instance, we instructed the banks to present a fee schedule, starting in 2017, that includes a significant discount on all customer-executed transactions.


In response to the Banking Supervision Department directive, the banks set out streamlining programs through which about 5,100 employees would leave the banking system between 2016 and 2020, through voluntary retirement or natural retirement (most of which would not be replaced by new employees).  This represents a gross reduction of 12 percent of the banking system’s workforce.  In parallel, the programs published show that the deployment of branches will be changed, such that by 2020, the number of bank branches in Israel will be reduced by about 20 percent.  Alongside this, significant changes will be made in the banks’ internal work processes and vis-à-vis customers.  The reduction in the number of branches being implemented by some banks will take place as customers transition to direct banking, which is being made available, inter alia, through Banking Supervision Department directives that make it easier to remotely carry out transactions, and innovative digital developments being advanced by the banks.  For instance, a reform was recently implemented allowing the deposit of checks through smartphones, increasing the number of ATMs where an increasing number of banking activities can be carried out, and more.