Revolut receives conditional license to launch digital bank in Israel

The Bank of Israel issued a conditional license on Tuesday to Revolut, allowing the global fintech company to establish a new banking entity in the country. This regulatory move is designed to increase competition in Israel’s banking sector, which has long been characterized by high concentration and limited choice for consumers.

Bank of Israel Governor Amir Yaron and Supervisor of Banks Daniel Hahiashvili announced that the review and inspection process for the new lender, to be named Bank Revolut Israel, has been completed. Yaron described the approval as the initial step in founding the bank, noting that Revolut will work alongside the central bank to finalize the remaining requirements. He emphasized that introducing new players is the primary method for boosting competition, a goal the regulator has pursued for years by removing entry barriers.

This is the third new banking license granted by the Bank of Israel since December 2019. The approval is part of a broader strategic effort to disrupt a market dominated by five major banks. Critics have long argued that this lack of competition allows these institutions to charge excessive fees while offering sluggish or low interest rates on deposits and savings products.

Finance Minister Bezalel Smotrich welcomed the decision, stating that the government's objective to foster competition is beginning to yield results. He highlighted that the 'small banks' reform is a cornerstone of the latest Economic Arrangements Law. Smotrich added that breaking down market concentration and opening the sector to genuine competition are fundamental principles of the country's economic policy, attracting international players who bring innovation and lower prices.

With this initial hurdle cleared, Revolut can now proceed to meet mechanical, operational, and regulatory requirements to become a fully licensed bank. The London-based company, founded in 2015, currently serves more than 80 million customers worldwide and is valued at $115 billion. In 2026, the firm expanded its footprint by launching banks in the UK, Mexico, Australia, and New Zealand, while also securing licenses in France, Colombia, and Argentina.

Revolut operates as a digital bank without physical branches, offering services such as payments, currency exchange, credit, and deposit products for both households and businesses. The company has not yet disclosed the specific digital banking services it intends to offer to the Israeli public.

The new entity will be led by CEO Uri Nathan, who previously served as the chief executive of Pepper, Bank Leumi’s digital banking platform. Shmuel Ben Zvi will serve as the chairman. Nathan stated that the goal is to create genuine competition in the Israeli market through a world-leading digital financial services platform.

Revolut follows in the footsteps of One Zero Digital Bank Ltd., the country’s first fully digital bank, which launched operations in early 2023. It was established by tech entrepreneur Amnon Shashua and marked the first new bank in Israel in over four decades.

The second digital bank, Esh Bank Israel Ltd., received its full banking license in 2024. Co-led by Nir Zuk, the founder of cybersecurity firm Palo Alto Networks, the bank has operated in stealth or pilot mode for the past two years, serving only invited customers. Its planned public launch in 2026 now appears to have been delayed.