Bank of Israel Proposes Digital Mail Shift, Threatening Postal Services and Printers

The Bank of Israel has released a draft proposal for public comment that would shift the default for bank notifications from physical mail to digital delivery. This move, aimed at improving customer service and efficiency, has sparked significant opposition from Israel Post and Bari Print, a major printing company, who fear it could lead to their near-collapse.

The proposed change would make digital delivery the default for all bank customers unless they opt out. "Digital message delivery addresses a need that arose from the field, adapted to the nature of financial activity," stated Daniel Hachueli, Supervisor of Banks. He assured that the move would be monitored to ensure customer benefit, including provisions for unique populations and maintaining choice.

However, the proposal has ignited a fierce debate. The Internet Association initially welcomed the digital shift but advocated for a gradual, opt-in approach rather than a mandatory default change. Concerns have been raised, particularly by Members of Knesset, about the impact on elderly citizens, new immigrants, and other populations not accustomed to digital systems. MK Shelly Tal Myron estimated the move could save banks NIS 250 million annually but stressed the need to protect consumers.

In response to these concerns, the Bank of Israel clarified that the new policy would not apply to customers aged 70 and above, those who prefer physical mail, or individuals who do not engage with digital updates. Despite these concessions, a previous discussion in the Knesset's Economics Committee in February, chaired by MK David Biton, had recommended halting the change due to potential harm to public entities. Committee recommendations were sent to Bank of Israel Governor Prof. Amir Yaron in July, suggesting no change to the current format was warranted at that time.

The sudden release of the draft proposal, particularly during a transition period between Knesset terms and against the committee's prior recommendations, has surprised many. Israel Post and Bari Print, which had prepared campaigns against the potential move, were caught off guard. For Bari Print, whose primary clients are banks, the elimination of physical mail could be devastating, potentially impacting 70% of their business and leading to significant layoffs. Israel Post also anticipates a substantial decline in its mail volume, though not a complete collapse due to its other services like package delivery.

Arguments against the proposal include the banks' long-standing efforts to cut printing costs, the public's current vulnerability to phishing and cyberattacks making them wary of digital financial communications, and the potential domino effect on other industries reliant on physical mail. There is also a perceived irony in a state entity potentially undermining Israel Post, which was recently privatized.