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Esh aims to challenge Israel’s traditional banking sector by sharing 50% of the interest it earns on customer balances.
By Shula Rosen
Esh Bank Israel, the country’s newest digital lender, plans to begin operations in early 2026 with a model offering zero fees and equal profit sharing with customers.
The fully digital bank, co-founded by American-Israeli tech billionaire Nir Zuk—founder of Palo Alto Networks—aims to challenge Israel’s traditional banking sector by sharing 50% of the interest it earns on customer balances.
The Bank of Israel granted Esh its license in 2022, marking only the second such approval in more than four decades.
After two years of pilot operations with select users, the bank will begin a limited public rollout next year, allowing existing clients to invite others to open accounts.
Group CEO Yuval Aloni told The Times of Israel that Esh will operate without physical branches or the standard service charges imposed by traditional banks.
“Our customers will have completely free accounts with no hidden fees, full transparency, and high interest on current accounts,” Aloni said. “We share 50% of revenues the bank earns from using customers’ deposits, while operating expenses are covered from the remaining half.”
According to Aloni, customers will be able to view the interest their money earns in real time through a live ticker on the app, with payouts automatically deposited each week.
“We are creating an equal sharing model that eliminates the conflict of interest in traditional banking,” he said. “Unlike other banks that use customer deposits to profit for themselves, we show exactly how much is being earned and shared.”
The founding team includes former Bank Massad CEO Kobi Malkin, former Israel Securities Authority head Prof. Shmuel Hauser—who serves as chairman—and Dr. Nadine Baudot-Trajtenberg, a former deputy governor of the Bank of Israel, as deputy chair.
Israel’s banking system is dominated by five major institutions that have long faced criticism for high service fees and limited competition.
Many households have struggled under rising borrowing costs and record bank profits amid a prolonged economic downturn. “We tried for years to increase competition in the sector—it’s not easy,” said Baudot-Trajtenberg.
“Financial products can be complex, and that complexity often benefits the supplier, not the customer.”
Esh Bank will be supervised by the Bank of Israel’s banking regulator to ensure financial stability and depositor protection. It follows One Zero Digital Bank, founded by Mobileye creator Amnon Shashua, which launched in 2023 as Israel’s first fully digital bank in over 40 years.
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