Indian technology firm Tata Consultancy Services (TCS) is set to provide a front-to-back banking platform for the first Israeli bank to launch for 40 years.
TCS won a contract from the Bank of Israel in 2019 to build a new banking platform which would enable the standing up of digital challengers in the country.
“One of the most important items in the [deal] was that the potential suppliers would sign with at least one new candidate bank,” Eyal Moskal, country head for TCS, tells FinTech Futures.
The digital bank, which has not disclosed its name, is aiming for a 2021 launch. Founded by entrepreneurs Amnon Shashua and Marius Nacht, it has an equity of around $120 million.
It was given the green light by the Bank of Israel in September 2019, which has been looking for ways to diversify the Israeli banking sector.
Bank Leumi and Bank Hapoalim hold a duopoly in the country, with the two banks accounting for 55% of market share. Both banks run their own digital offshoots – Leumi’s Pepper and Hapoalim’s Bit.
Former Pepper co-founder Gal Bar Dea is stepping in as CEO of the new challenger, while Shouky Oren, a former CEO of Leumi in Switzerland, will take up a role as chairman.
The new digital bank is set to be 100% run on the newly-created TCS Service Bureau Platform – a front-to-back package which includes the vendor’s flagship TCS Bancs core banking system.
Moskal tells FinTech Futures that the platform encompasses not just core systems but also major security capabilities and other peripheral services.
“TCS will be building the entire infrastructure. The software layer, the digital layer, core banking, security. It will be solely operated by TCS and provided as a service.”
While the digital bank is the first major customer of the new platform, TCS has already signed a second – a corporate bank in Israel that is in the process of obtaining its banking licence.
Moskal says that it has been a big coup for TCS and made waves in the industry. “Many people are calling us trying to understand what exactly we’re building, and how they can potentially get involved in this disruption of the banking sector.”
He adds that insurance firms, credit card companies, retailers and telcos have all been in contact.
See also: Challenger banks in the Middle East