Israel-based esh Bank is on its way to building an “AI-native” bank that shares the revenue it generates from making loans. 

“Esh stands for equal sharing,” Yuval Aloni, the chief executive and co-founder of esh Group, which is the parent organization of the digital bank, told FinAi News. “We take the revenues of the bank, and we share it 50-50 in real time with our depositors and customers.” 

The digital bank is able to provide transparency and revenue sharing to clients by using AI tech, which automates repetitive processes and allows it to keep a low headcount. The bank also uses AI to update customer account balances in real time.

“It’s not just sharing revenue and updating clients — we have embedded AI in nearly all processes of the bank,” Yuval Aloni said. 

Aloni was recently named as an executive to watch by FinAi News.  

See the full list of 14 FinAi News execs to watch here. 

AI-native operations

Esh Bank’s tech infrastructure allows bankers to use AI in day-to-day operations, Nadine Bodo-Trachtenberg, esh Bank’s director, vice chair of the Board and former deputy governor of the Bank of Israel, told FinAi News. These ops include:

• Onboarding; 

• fraud detection; and  

• Lending decision assistance. 

Using AI, the bank can create products in hours.   

The bank built an end-to-end AI-driven platform called EoS that allows bankers to interact with the tech stack in natural language for knowledge and product development, Aloni said. 

Bankers make a request as simple as “create a college fund account” and EoS will develop the code and embed the product into its tech stack to roll out, Aloni said. The compliance and business teams then evaluate the product and decide whether it goes live. 

“The tech aspect can take as little as a few minutes to launch a new product, which makes our operations very agile,” he said. 

The bank is working with Amazon Web Services for its cloud and AI needs, Aloni said. He added that esh operations are cloud-agnostic and the bank is always evaluating new tech partnerships to improve its offerings. 

Rise of AI-native banks

The fintech world will soon see a lot of AI-native banks, Ravi Khokhar, global head of cloud at consultancy Capgemini Financial Services, told FinAi News. 

“AI-native banks or AI neobanks operate differently,” Khokar said. “Rather than embedding [an] AI solution, they have built their entire model around the technology, which gives them great agility to innovate.” 

Bank customers care about better experiences and low risk, he said. “A sophisticated AI-based platform directly correlates to these expectations from the users.” 

2 years in stealth mode

Launching a bank in Israel was a journey, Aloni said. In the past 50 years, esh is one of only two banks to have received bank charters from the government. 

“It took us several years to build the team to work with the regulators to get the charter, which was in December 2022, and then it took us less than one year to start operating,” Aloni said. 

Under Israeli government guidelines, a chartered bank must operate for nearly two years with a limited number of clients to prove it is capable of handling money, Aloni said. The bank plans to go live for commercial use in January. 

Esh Bank aims to expand operations to the United States sometime within the next 18 months, depending on growth. 

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