Senior banking executives in Israel are taking home huge paychecks, and it’s hurting public confidence, Supervisor of Banks Hedva Ber said on Thursday.
“The Banking Supervision Department has been taking action in this area,” she said, “and bank chairmen’s salaries are slated to be cut during the coming year, following an instruction issued [by the] Department six months ago.
“In addition, with the Bank of Israel’s support, legislators are promoting a bill reflecting their concept of the proper remuneration for financial-sector senior executives. Of course, remuneration must be directly connected to business results and the difficulty of the activity,” Ber noted.
Speaking at a conference on the theme “Technology Is Changing the Face of Banking,” Ber rejected Finance Minister Moshe Kahlon’s prediction that “in ten years, there will be no banks” due to technological progress.
Instead, she envisioned a banking utopia offering all sorts of advantages to the consumer.
“What will the banks look like in 10 years? They will be different — more technology, more competition, and more efficiency. Adoption of technologies and innovation will enable the banks to provide more diverse services to customers at a lower price, with more transparency. The customer will be able to consume some of the services from non-bank entities, in which he keeps his current account. The new infrastructure and technological tools will lead to non-bank groups and FinTech companies specializing in specific niches of financial services and products operating next to the banks. Some are expected to work in cooperation with the banks, while others will compete with the banks and take away some of their revenue.”