BoI eases rules for online portfolio management services

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Customers will be able to give an investment house or fintech company power of attorney without going to their bank branch to show the power of attorney.

The Bank of Israel is making activity by portfolio managers with their customers' accounts easier. The Bank of Israel Banking Supervision Department today published draft amendments on the subject of "E-Banking," according to which customers will be able to give their portfolio managers power of attorney to operate their accounts, and will not have to go to the bank branch to show the power of attorney. Portfolio managers will also be able to perform transactions in online accounts.

Customers will be able to appoint such a portfolio manager whether he works in investment house or a fintech company providing robo-advice. Robo advice is management of investments through advanced technological means based on a constant scan of the market situation, combined with an analysis of the investor's profile and risk. This sector, which has developed in recent years and is on a growth trend, appeals mainly to small customers who lack enough capital to justify the use of a conventional portfolio manager.

"Due to the technological advancement in the area of remote identification and authentication of customers, and pursuant to the leniencies granted by the Banking Supervision Department in the process of opening an online account, the amendments serve as an additional significant step toward customers being able to conduct full banking activity remotely, without having to travel to the branch," the Bank of Israel stated.

The purpose of this easing of restrictions is to bolster competition in management of customers' portfolios and investments, and to remove bureaucratic barriers in a customer's work with non-banking portfolio manager.

Published by Globes [online], Israel business news - www.globes-online.com - on April 9, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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