With ‘digital branch,’ Hapoalim pushes banking into 21st century

New features include smartphone-based ATM withdrawals.

Poalim Digital
Israel’s reputation as a technological leader is known around the world, but here at home, the two reminders that we are slow at adopting technology are banks and the postal service.
Bank Hapoalim on Tuesday put a big dent in that perspective, as it opened its “digital branch,” the first in Israel and one of just a handful such experiments around the world.
Modern banking customers, said Hapoalim chairman Yair Seroussi, “expect experiences from us like they get from Amazon and Google. An we must provide them that experience here and now.”
The branch in Tel Aviv at the corner of Nordau Avenue and Ibn Gvirol Street, one of four currently in the works, has no teller booths, lines or numbers. Users set a time online; a Bluetooth detector can sense when the customer enters the store and send a notification to a waiting teller’s Apple Watch.
With its modern styling, enormous touch screens and iPad terminals, the branch rips a page right out of the Apple Store design book.
In reality, the digital branch has two purposes above serving customers in a sleek new environment.
One is an advertisement for Hapoalim’s digital services.
The vast majority of the operations the bank lets you carry out online or on its app obviate the need to come to a branch at all (the exception being transactions above certain thresholds and opening an account).
The reason for opening a branch that focuses on the things you can actually do at home is to make customers aware that there’s a new way to bank, one that doesn’t involve coming in, taking a number, filling out forms and signing on the dotted line.
Having an imposing physical space for digital is an attempt to educate the public, a sensible measure given that it costs the bank more to pay tellers and staff for operations customers can do from their smartphones.
It also pushes the bank’s brand as a digital leader, an image it has made great efforts to bolster through, for example, sponsoring competitions for financial start-ups. It recently brought former Intel Israel president Mooly Eden on as an adviser.
The other reason for the branch is a lab. The bank, says Serroussi, will be testing out new digital products and adjusting them based on customer reactions. The digital branch is expected to appeal most to customers who already are already entrenched in the bank’s digital products, and will show what works and what doesn’t. The success stories will be pushed to the “traditional” branches.
One such feature is using smartphones instead of ATM cards. Customers can open their app, pick an amount to withdraw (and even select what denominations of banknotes they want), even before they leave the house. When they pass the ATM, they use the same no-contact technology behind Apple Pay and Google Wallet to retrieve their cash.
Given that most retailers in Israel haven’t adopted contactless payment technology, the bank’s move is a serious jump ahead.