More ATMs, fewer tellers as banks streamline

ATM  photo: Photos To Go

A Bank of Israel report shows that only 500,000 customers are taking advantage of options for lower current account charges.

The number of automated teller machines (ATMs) in Israel soared 138% between 2005 and June 2016, according to a biannual report published today by the Bank of Israel. In the report, the Banking Supervision Department published for the first time data about ATMs showing that their number was rising steeply. As of June 30, 2016, there were 1,933 ATMs in Israel, an increase of nearly 6% in six months. In the longer term, the rise has been substantial: 583 machines were added within 3.5 years, a 43% increase. The number of ATMs has doubled within a decade.

It appears that the steep increase is part of the streamlining trend at the banks, including closing down branches, and especially eliminating teller windows. The banks, primarily the largest ones, have closed a substantial proportion of teller windows, while adding ATM machines. In addition to cash withdrawals, these machines can also be used for a series of bank transactions, such as depositing cash and checks, and even taking loans.

"The ATMs have become a mini-bank branch"

Since the streamlining trend is likely to continue, it can be assumed that the number of machines will continue to increase. The Bank of Israel stresses that for ATM cash withdrawals up to 500 meters from the branch (77% of ATMs) the maximum charge is the same as through a direct channel (NIS 1.50-3). In contrast, a bank is allowed to charge NIS 7.50 for cash withdrawals from an ATM more than 500 meters from a branch.

More credit cards

The Bank of Israel report on the first half of 2016 also points to the ongoing slide in current account charges. The figures show that the average monthly cost of a current account is still going down. The average cost in the first half of 2016 was NIS 24.80, a 3% decrease in six months, and 15% less than five years ago. The decline is in spite of the fact that revenue from credit cards increased. The credit card costs for a household averaged NIS 11 a month as of June 2016, over 20% more than five years ago.

The Bank of Israel notes that the rise results from a 26% increase in the number of credit cards within five years: from a per bank account average of 1.1 cards in 2011 to an average of 1.4 cards in June 2016. "The cost of keeping a credit card remained stable over time, but customers are holding more credit cards on the average," the Bank of Israel writes.

The Bank of Israel report also discloses the aggregate figures for current account plans. Three years ago, the Bank of Israel ordered the banks to offer at least two current account plans: a basic plan for private customers costing NIS 10 a month and an expanded plan designed mainly for small businesses, which usually cost NIS 20-30. In most cases, the prices of the plans were far lower than the tariff for the mix of transactions included in them. According to the figures, 500,000 customers have joined the plans to date. Half of those joining, however, did so following the Bank of Israel instruction last September, which ordered that senior citizens and handicapped people be added to the plan automatically.

Bank of Israel figures indicate a potential for 1.8 million more customers reducing the charges they pay by joining the plans (the rest of the customers pay less than the cost of the plans in any case). The Banking Supervision Department states that at the beginning of last year, they asked the banks to scan the list of charges and to cancel unnecessary charges. According to the report, the charge for handling inheritances was canceled, and an exemption was granted for those receiving pensions from countries in the former Soviet Union, as well as an exemption from fees for producing standard reports.

Published by Globes [online], Israel Business News - www.globes-online.com - on February 1, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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ATM  photo: Photos To Go
ATM photo: Photos To Go
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