Michal Kissos-Hertzog, head of innovation and digital at Bank Leumi, talks to Global Finance about mobile banking, millennials, investment products and their impacts.

Author: Hilary Johnson


Michal Kissos-Hertzog

Global Finance: How has Bank Leumi’s digital strategy evolved over the years?

Michal Kissos-Hertzog: I always quote Bill Gates, who said in 1994 that “banking is necessary, but banks are not.” Our CEO understood several years ago that the banking industry, like others, is in the midst of disruption. We realized that we had to transform the bank. We established a digital banking division dedicated to leading the bank into the digital age. We also decided that we would be a data-driven bank. One project we undertook was to develop a mobile-only bank for millennials, called “Pepper,” which was recently launched and has no branches and no current account fees. Another initiative was setting up an innovation team with the aim of establishing meaningful relations within the Israeli and global tech ecosystem, including collaborations with the fintech industry.

GF: Tell us more about fintech relations.

Kissos-Hertzog: For many years, banks perceived the fintech industry as a threat. Today we understand that fintech is not the enemy; it can be a great partner. Fintechs can reach millions of customers through the banks, and banks can use fintech offerings to provide a better value proposition to their customers. The biggest winner of all is the customer. We are working in three channels with regards to fintech: We are inventing digital products and platforms ourselves, such as Pepper; we are collaborating in order to develop innovative products and services; and we also have a venture capital arm that invests in fintech companies.

GF: Pepper is a mobile-only bank. How is mobile tech changing Bank Leumi overall?

Kissos-Hertzog: Today, over 70% of our customers use mobile to perform banking transactions. With the increasing use of digital banking, we don’t need so much real estate to approach our customers. It also means lower investments in maintaining heavy and expensive legacy core systems, as our mobile banking platforms are more advanced and lean.

GF: What is the thinking behind your investment products?

Kissos-Hertzog: In Israel we see different types of customers invested in capital markets, not just high net worth individuals. This can be students, young families, pensioners—basically anybody who works hard to save some money.

Many of them have small investment portfolios and we want to provide them with a simple and friendly interface so they can easily manage their portfolio and get a real-time snapshot of their investments and returns, anytime and anywhere they are. The “Leumi Trade” capital market trading and investment website and app, offer our customers a broad spectrum of investment products in Israel, the US and Europe, at the touch of their thumb.


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