Banks Required to Share Information about Clients with Other Financial Bodies
The Ministry of Finance is leading a broad change to increase competition in the banking and financial services market. As such, it recently published a memorandum for the Provision of Financial Information Services Law for public comments.
The goal of the law is to regulate the sharing of financial information held by banks and credit card companies about their clients with other financial service providers (non-banking). This will enable such financial service providers to concentrate information for clients (with their consent) online and offer them services customized for their needs, as well as to present them with alternatives, rate and fee comparisons, and more. All this is in order to provide clients with services that examine their ability to better their financial situations through movement between different financial service providers.
In the first stage, the duty to share information will be imposed, as noted, on banks and credit card companies. Later, the possibility of imposing this duty on pension companies, insurance, brokers, and other bodies will also be explored.
The memorandum establishes rules on protecting clients’ privacy and a licensing duty for receiving the financial information. It also authorizes the Israel Securities Authority to act as the regulator to supervise this activity.
To review the memorandum, click here.