Marius Nacht, the billionaire co-founder of Check Point Software Technologies, is in talks with regulators about establishing Israel’s first digital bank and the country’s first new bank in nearly half a century.
Together with Ezra Uzi Yemin, the CEO of the American energy company Delek US Holdings, Nacht is leading a group of potential investors that have been in talks with the Bank of Israel and the Finance Ministry for a number of in recent weeks.
Sources said that Nacht, whose personal fortune has been estimated at $2 billion, and Yemin, whose net worth is in the hundreds of millions of shekels, would each invest $30 million in the bank. Additional investors would later put in another $60 million, sources said.
The initiative comes as the government seeks to introduce more competition into Israel’s banking sector, including by forcing the two biggest banks to spin off their credit card units and lowering the bar of entry for establishing a credit union. The state hopes that increasing competition will lead banks to reduce their fees and make it easier for customers to obtain loans.
Other groups, including the Direct Insurance group and the two soon-to-be-independent credit card issuers, have approached regulators about setting up digital banks. These talks, however, have not advanced, sources said.
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Banks Supervisor Hedva Ber said last week that the Bank of Israel expects to issues its first license for a digital bank within a year, noting that “several groups” had approached her on the issue.
She said the technology existed for what she called “thin digital banks” with significantly lower costs than traditional banks that could enable households that had never considered taking a loan to do so.
Nacht’s technology background is in cybersecurity. He remains chairman of Check Point and a major shareholder, although he recently cut his stake to 4% from 12%, and invests in cybersecurity startups. His health care fund aMoon last week secured a $250 million investment commitment from Credit Suisse.
Yemin, like Nacht, has no banking background. He began his career as insurance regulator and eventually joined Yitzhak Tshuva’s Delek Group, where he set up the company’s Delek US unit. Delek Group has since sold control but Yemin remains CEO. He has been living in the United States for 17 years. As a nonresident of Israel, he won’t be able to take an active role on the board of the prospective digital bank.
The sources said Nacht was interested in forming a digital bank for Zionist reasons. This month he invested in the European banking app Numbrs as part of a $27 million funding round. Numbrs allows users to manage their bank accounts and personal finances via a single “dashboard” and cooperates with institutions such as Deutsche Bank Group.
The Nacht-Yemin group has retained David Zaken, a former banks supervisor, as its legal adviser and go-between with the regulators. It has also retained an unidentified accounting firm to prepare a detailed business plan.
Sources said the Nacht-Yemin group was conditioning its application for a banking license, which would be the first new one granted in Israel in 46 years, on three conditions: the establishment of a system of deposit insurance in Israel; permission for new banking entities to jointly outsource computing services in order to cut costs and a regulatory change to allow the introduction of the API standard designed to provide access to the banks’ closed databases, thereby bolstering competition in the banking system.