One Zero Digital Bank Navigates Growth, Losses and New Market Competition
One Zero Digital Bank reaches 205,000 clients and ₪4 billion in deposits amid ₪1.37 billion in losses, as founder Amnon Shashua reportedly explores a stake sale.
Seven years after entering the Israeli banking landscape with the promise of disrupting a concentrated market, One Zero Digital Bank stands at a critical juncture. The digital lender has expanded its client base to over 205,000 customers, while total deposits have climbed to approximately 4 billion shekels. Despite narrowing operational losses, the bank faces cumulative losses of 1.37 billion shekels since its inception.
Recent reports indicate that Professor Amnon Shashua, the founder and majority shareholder holding roughly a 60% stake, is exploring an exit through a transaction valuing the institution at around 1 billion shekels. Concurrently, the competitive arena has intensified following Bank of Israel's decision to grant a conditional license to British fintech giant Revolut, introducing an international heavyweight with 80 million global users directly into the domestic digital banking space.
Business Model Evolution and Market Competition
Addressing the background noise surrounding a potential sale, Chief Executive Officer Eyal Gafni emphasized the ongoing commitment of the founding stakeholders. "Professor Shashua and our other shareholders continue to support the bank and invest capital until the bank becomes profitable, and that has not changed," Gafni stated, noting that he is unaware of the bank being officially on the market.
While the bank initially championed a fixed subscription fee model akin to software companies, customer preferences prompted a strategic pivot. Approximately 35% of clients now route their salaries through the platform, allowing the bank to waive monthly subscription fees for active users. Furthermore, securities trading revenue surged by over 50%, bolstered by transparent pricing and commission structures for local and international equities.
International Setbacks and Strategic Expansion
International ambitions faced a significant setback following the outbreak of the ongoing conflict on October 7, 2023. The bank spent nearly two years negotiating a partnership with Italy's Generali Group to establish a parallel digital platform in Europe. However, shifting geopolitical sentiments ultimately forced the suspension of the project, leading to the departure of former CEO Gal Bar Dea in late 2024.
On the domestic front, Gafni remains unfazed by Revolut's market entry. "A 100 billion dollar fintech giant does not enter any market unless someone before it has already succeeded," Gafni remarked, expressing confidence in the local institution's tailored technological edge over international competitors and legacy traditional banks.
Technological Efficiency and Workforce Adjustments
To optimize operational efficiency, One Zero recently implemented its third round of layoffs in two years, cutting roughly 25 employees—equivalent to 7% of its workforce—and freezing ten open positions. The bank attributes these reductions to accelerated automation and digital development processes designed to improve the cost-to-income ratio.
Looking ahead, Gafni envisions a financial ecosystem deeply integrated with artificial intelligence. The bank is currently experimenting with advanced AI chat models designed to synthesize a comprehensive 360-degree view of a customer's financial life, from daily checking accounts to long-term pension portfolios, positioning the technology as the future of consumer banking.
