Official: Technology Will Shut Down Hundreds of Bank Branches

YERUSHALAYIM -
The logo of Bank Hapoalim, Israel's biggest bank, at their main branch in Tel Aviv. (Reuters/Amir Cohen/File)
The logo of Bank Hapoalim, Israel’s biggest bank, at their main branch in Tel Aviv. (Reuters/Amir Cohen/File)

Israel’s Supervisor of Banks, Dr. Chedva Barr, said at a business conference in Tel Aviv that technology would change the way Israelis did their banking. Some 5,100 workers will leave the banking profession in the coming five years, as many as 15 percent of the total number of employees in the banking business. In addition, 220 bank branches, about 20 percent of those currently operating, will close, as more customers do their banking from mobile devices.

This development is not necessarily bad, either for customers or banks. As banks invest in technology, they will be able to offer customers more sophisticated services and capabilities without requiring them to travel to branches to do their business. Meanwhile, banks themselves will be more efficient and limber, saving money on real estate and the costs of running physical branches. The savings could amount to as much as a billion shekels a year, she said. Those savings will be passed on to the public, at least partially, she added.

With that, the transition may not be as smooth as some hope. In recent months, Bank Leumi customers in the Golan Heights town of Katzrin were up in arms over a decision by the bank to close its direct service department – the tellers who handle deposits, withdrawals, and other normal bank business – forcing customers to use on-line banking services only, or to rely on automatic teller machines at the bank’s branch. Katzrin has only one Bank Leumi branch, and while the bank has executed similar plans in other towns, there were other branches in the towns where that change was instituted.

Customers quoted by business daily Calcalist said that the change would negatively affect many residents. The bank has many older customers, a consumer group in the town said, and those customers are unlikely to adapt easily to the changes, especially to the forced reliance on digital banking services.

In a statement, Bank Leumi said that the move was being undertaken as part of a bank-wide efficiency program. “As part of that effort, teller services at the Katzrin branch will be eliminated. The branch has numerous ATMs which customers can use that provide most of the services available at teller windows, including withdrawals of cash and depositing of checks. We are aware of the needs of older customers, and take the issues seriously. We realize that adapting to these changes may be difficult, and as a result we will be providing staff who can help them navigate the new system.”