Israeli Bank to Launch Digital Challenger in the US
22 de Noviembre, 2018
Tiempo estimado de lectura: 2 minutos
Israel-headquartered Bank Leumi is currently in talks with potential partners to expand its digital bank, dubbed Pepper, to the US.
Pepper, which launched in Israel in 2017, allows users to manage their finances through its mobile app, without being charged a monthly fee. It also uses AI to support its onboarding process, the transfer of money, taking out loans, and managing savings and deposits. It currently opens more accounts per day than its parent bank across its 250 branches in Israel, per The FT.
The lucrative US market is still relatively untapped by challengers. When looking at other options, including the UK and India, the US was the most attractive option due to its size, the company said. Moreover, banks in the US have not had to contend with the rapid rise of digital challengers as other markets have, especially in Europe. As such, while many legacy players in the UK have been forced cut down on fees and prices to compete with tech-savvy neobanks, US banks still charge customers plenty of fees, including when making ATM cash withdrawals. By offering cheap and free digital services, Pepper can fill this gap in the US market.
However, Pepper isn’t the only new entrant looking to capitalize on this opportunity. Pepper will join a number of other foreign challenger banks that want to set up shop in the country. German N26 and UK-based Revolut have both announced plans to expand their businesses in the US. Additionally, Barclays aims to launch an online challenger bank in the US next year. This foreign interest has been met by domestic players introducing similar projects. Goldman Sachs launched its digital arm Marcus in 2016, and Chase rolled out its digital spinoff Finn earlier this year. It appears that, after a slow start, the US banking market is now on the cusp of a digital transformation that will bring an influx of new products and services to the country — as well as heightened competition.
Fuente: Business Insider
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