Fintech giant Revolut gets central bank nod to set up new digital bank in Israel

Israel’s central bank on Tuesday granted Revolut a conditional license to establish a new bank in the country as the global fintech giant prepares to offer its digital banking services to local customers in a move that regulators said would increase competition in the highly concentrated sector.

Bank of Israel Governor Amir Yaron and Supervisor of Banks Daniel Hahiashvili said that following the completion of the review and inspection process, the Bank of Israel issued a conditional license and control permit for the new lender to be named Bank Revolut Israel.

“This is a first step toward founding the new bank, and alongside the Bank of Israel’s guidance, they will work to complete the process,” said Yaron. “The main path to increasing competition is bringing additional players into the sector, and over the years we worked to remove entry barriers and create the conditions for new players to enter the banking system.”

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The approval is the third license since December 2019 that the Bank of Israel has granted for the launch of a new bank, as part of an effort to boost competition in the highly concentrated banking sector, dominated by five banks.

With limited competition, the country’s main banks have been charging excessive fees with little fear of blowback. When it comes to interest paid on deposits and savings, the lenders have been criticized for sluggishness in offering customers higher rates accordingly, or for failing to do so altogether.

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“The objective of the Finance Ministry to foster competition within the banking sector — centered on the ‘small banks’ reform, a cornerstone of the latest Economic Arrangements Law — is bearing fruit,” said Finance Minister Bezalel Smotrich. “Breaking down concentration in the banking sector and opening the market to genuine competition are fundamental principles of our economic policy.”

“An open economy and a free market attract leading international players, who bring with them innovation and lower prices for citizens,” said Smotrich.

Passing the initial hurdle allows the fintech firm to move forward and meet mechanical, operational and regulatory requirements to become a fully licensed bank and start offering services to customers in Israel.

London-based Revolut was founded in 2015 and serves more than 80 million customers worldwide. Valued at $115 billion, the firm expanded in 2026 by launching banks in the UK, Mexico, Australia and New Zealand, and securing banking licenses in France, Colombia and Argentina.

Revolut is a digital bank with no physical branches and offers a range of digital financial services, including payments, currency exchange, credit, and deposit products for households and businesses. The fintech firm has not disclosed which digital banking services it plans to offer to the Israeli public.

Bank Revolut Israel will be led by CEO Uri Nathan, former CEO of Pepper, Bank Leumi’s digital banking platform, and Shmuel Ben Zvi as chairman.

“Our goal is to create genuine competition in the Israeli banking market through a world-leading digital financial services platform, and we look forward to bringing this offering to the Israeli public,” said Nathan.

Revolut follows in the heels of the first fully digital bank, One Zero Digital Bank Ltd., set up by tech entrepreneur Amnon Shashua, the nation’s first new bank in more than 40 years, which launched operations in early 2023.

Esh Bank Israel Ltd., the country’s second digital bank, co-led by Nir Zuk, the American-Israeli billionaire founder of cybersecurity firm Palo Alto Networks, Inc., was awarded a full banking license in 2024. For the past two years, the digital bank has operated in stealth or pilot mode, serving invited customers only. Its planned public launch in 2026 now appears to have been delayed.

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