Bank Leumi Launches Digital Bank Pepper For Mobile Phone Customers

Bank Leumi has launched Pepper, a digital banking venture that will initially offer current individual accounts and later move into securities and mortgages, as well as joint banking options.

According to news from Globes.com, Pepper does not have an independent banking license, but Bank Leumi is branding it separately from the bank itself. Pepper can only be used on a mobile phone — it has no branches or even a website. Customers can download the mobile bank’s app and simply open an account using their phone.

It’s estimated that Bank Leumi has spent NIS 300 million on Pepper to date, including an investment in designing core systems and the hiring of over 100 employees.

“I know that our competitors are saying that Pepper is a gimmick. Were it a gimmick, it would be irrational to invest so much in it for two years,” said Bank Leumi First Executive VP and Digital Banking Division Head Tamar Yassur at a press conference.

Currently, mobile bank Pepper offers basic current account services, such as use of credit cards and checks, deposits and credit but expects to later have capital market, securities and mortgage activity.

And since Pepper works only on mobile phones, individual accountS can only be opened at this time, which could actually help the venture attract Generation Y customers, which is its main target. But joint accounts might be offered as soon as next year.

“Customers are indifferent to banking,” said Tamar Yassur. “A customer usually changes banks as a result of a negative experience. We don’t plan to wait for people to accumulate negative experiences. We want to make customers realize that there’s something new and different here. In the past, a bank could use an aggressive marketing campaign to sell a mediocre product. Today, customers choose and switch with a click, and we have to offer them the best product around.”