Bank of Israel extends the 'Follow Me' mechanism for switching between banks until 2029
The Banking Supervision Department at the Bank of Israel has proposed extending the automatic payment routing service for customers switching banks by three years. The measure aims to ensure financial continuity.
The Banking Supervision Department at the Bank of Israel has published a draft directive proposing a three-year extension of the automatic routing service ('Follow Me') for customers transferring accounts between banks. The mechanism, which ensures that debits, credits, and checks are automatically forwarded to a new account, was originally set to expire three years after the transfer date.
Under the proposed amendment, the routing period for all customers who have performed or will perform an online transfer by September 21, 2026, will be extended until October 16, 2029. The Bank of Israel clarifies that the standard three-year routing rule will remain in effect for future transfers. However, a special transitional provision has been introduced to protect customers who have already switched or will switch in the near future.
The 'Follow Me' mechanism is a key component of the 'Switch in a Click' reform, designed to foster competition within the financial sector. The online system enables customers to transfer their banking activity securely and at no cost. The decision to extend the service for a second time follows data showing that a significant number of active routings persist even three years after an account transfer, indicating strong public reliance on the service.
The Bank of Israel acknowledges that further cooperation with banking corporations and payment-processing entities—such as employers, credit companies, and authorities—is required to ensure that new account details are updated at the source, thereby minimizing the need for prolonged routing.
The reform, launched in 2021, aimed to remove barriers caused by consumer concerns over the complexity of switching banks. According to the Banking Supervision Department, over 200,000 customers have successfully completed an online transfer. A study published by the Bank of Israel’s Research Division last May confirms the reform's impact, noting that the annual probability of switching banks doubled from 0.6% to 1.4%. Researchers suggest this represents a structural shift that has even contributed to a reduction in overdraft interest margins for all customers.
