The banks' revenues from the collection of commissions continue to fall, according to a new report published yesterday by the Bank of Israel.
This is a periodic report by the Supervisor of Banks at the Bank of Israel on the prices of common banking services for households.
The current report reviews developments in 2020. During the period of this report there was a corona virus crisis, which led to a significant change in the public life routine.
This period was characterized by high uncertainty which affected the banking activity of the public, as reflected in the results of the report.
According to the report, in 2020 the declining trend in the ratio of commission income to banking system assets continued, from 0.92% in 2019 to only 0.76% in the past year. This declining trend began in 2009, when the ratio of commission income to banking system assets was 1.37 To date, there has been a cumulative decline of about 45%.
In 2020, there was also a decrease in the actual securities management fee (securities) fee charged in the banking system, in an average range of 5% to 10%, depending on the value of the portfolio. An increase in the number of securities transactions against the background of the corona crisis.
That is, it has once again been proven that a decrease in commissions increases the attractiveness of a particular product and in an overall view increases revenue.
The effect of the crisis
In 2020, the average cost of managing current account and holding debit cards to the account amounted to NIS 22.4 per month, a decrease of approximately 17% compared to the average cost from the end of 2019. The current cost of current activity amounted to NIS 11.3, a decrease of approximately 8% during 2020. The downward trend in account management costs intensified due to the crisis and the decline in economic activity.
The cost of credit cards amounted to NIS 11.1, a decrease of about 24% during 2020. The decrease was due to a decrease in revenues from transaction fees and withdrawals due to a decrease in the volume of activity due to the crisis. NIS per month, compared to NIS 6.5 in 2019.
The increase is due in part to the fact that many customers have completed the period of exemption from paying card fees, which was given to them as a joining benefit when issuing a credit card.
In September 2020, a price control order was issued with the aim of making it easier for customers to deal with the corona crisis, and encouraging them to avoid reaching branches during the crisis and conducting banking activities remotely.
The order reduced the following fees: immediate debit card fees, a lawyer's warning letter and action by a call center clerk.
The order was valid for six months, until April 13, 2021.
"Assisting the public"
The Supervisor of Banks, Yair Avidan, stated: "The purpose of the report is to convey information to the public, which will help him understand the costs involved in managing a bank account and economize his steps.
I reiterate my call on the public to make use of direct channels and digital means, and to recognize the rights they deserve and thus save costs.
I will note that in doing so, the inspectorate takes care in a variety of ways for populations that may find it difficult to operate the same direct means, in order to maintain a high level of service for them as well. "
"Also, in these days when the corona virus crisis is still in full swing, I call on the banking system to take over-sensitivity, especially in dealing with consumer issues that are at the heart of public sensitivity," Avidan concluded.