Brands selling financial products to Arab customers in Israel tend to start with the product: another card, another loan, another app. The verified data suggests starting somewhere else, with the way households actually manage their money. In a phone survey the Bank of Israel ran in Arabic among Arab adults in September 2023, 80%1 of respondents said they track their spending and would like a tool to do it. In the same survey, only a minority of all respondents use an app for the purpose. There is a gap between wanting a tool and having one, and alongside it a gap in financial knowledge, a gap in income and a large role for the human adviser. Here is what the data says, where it stops, and what banks, card issuers, insurers and fintech firms can do with it.

Lower pay, tighter budgets

According to the Israel Democracy Institute’s statistical report on Arab society, based on National Insurance Institute data, the average wage per month worked for someone living in an Arab locality was ₪9,0342 in 2022, against ₪14,6873 for someone living in a Jewish locality. The comparison is by place of residence, not by the worker’s own group, and mixed cities are left out.

The poverty figures show how thin the margin is. According to the National Insurance Institute’s poverty report, 37.6%4 of Arab families lived below the poverty line in 2024, against 14%5 of non-Haredi Jewish families.

Averages and rates hide a wide spread, so segment by region and income rather than assume a uniform audience. Even so, the message at market level is clear: many families have little room for error. In our view, an unexpected fee, unexplained interest or a double charge lands, in that situation, as a breach of trust rather than just a cost. A financial product that shows its full cost up front, in shekels and in Arabic, starts with an advantage.

Keen to track, missing the tool

The Bank of Israel survey was carried out by phone and in Arabic, on a sample representative of Arab society by gender, age group and area of residence. It was presented in February 2024 at a Bank of Israel conference on fintech as a lever for economic growth in Arab society. It is a slide deck rather than a full report, so the detail is limited, but the picture it paints is consistent.

The key finding is the gap between intention and tool. Most respondents say they already keep track of their spending and want something to help them do it, yet only a minority use an app for the purpose. In our view, this is not reluctance about technology but a market that has not yet been offered a product that fits it: tracking that speaks Arabic, shows the picture simply and assumes no prior knowledge.

According to the survey, the main areas where respondents lack financial knowledge are insurance products, ways of saving and dealing with the bank. The gap on insurance stood out among women, the youngest and oldest age groups and people without a university degree; on saving, among women, young people, single people and those without a degree. On the Bank of Israel’s financial literacy index, Arab society scored lower than both the general Jewish population and Haredi society, and the deck notes that it lags on every one of the measures.

These findings need careful reading. In our view, a knowledge gap is first and foremost a gap in access to information, not in ability. Whoever explains in plain Arabic what a policy covers, how a savings plan works and what each line on a bank statement means is meeting a need that respondents themselves identified.

Paying online is already a habit

In the Israel Internet Association’s survey for 2023 and 2024, of Arab adults who use the internet, 53%6 of respondents pay bills online and 93%7 own a smartphone. According to the report, most respondents also use the internet for banking. The report also found that Bedouin respondents living in the Negev used banking and financial services less than respondents in other regions.

The base here is internet users, not the Arab population as a whole, so these figures must not be presented as shares of all Arab citizens. Among those who are online, though, the digital habit is already there: most pay bills online and almost all carry a smartphone. Set that beside the Bank of Israel survey, with the caution due when combining two different surveys, and what seems to be missing is not the channel but the content: tools that help people manage money, not just move it.

The mortgage adviser in the middle

According to the State Comptroller’s report on the mortgage market, as reported by Ynet, 73%8 of mortgages in Arab society taken out from 2024 onwards were arranged with an external mortgage adviser, against 59%9 in the general population. According to the same report, the field is not regulated by law: there is no licensing requirement, no qualifying exam and no regulator supervising those who work in it. The report also says that the Bank of Israel does not hold the basic data it would need to set policy on mortgages in Arab society.

That cuts both ways. On the one hand, the adviser is a channel: a bank or developer that wants to reach Arab borrowers meets them, in most cases, through an adviser. On the other, it is a channel whose quality nobody checks, and the bank’s reputation rests on it. A plausible hypothesis, which the data does not test: part of the reliance on advisers stems from the same gap in knowledge about dealing with the bank that the Bank of Israel survey found. If so, a bank that explains itself better can build a direct relationship with the customer without cutting out the adviser.

What the data doesn’t tell us yet

We found no recent, verified figure for the share of Arab adults without a bank account. The figure usually quoted comes from a 2021 press article citing a Bank of Israel report we could not locate, so we have left it out. The verified data on debit card ownership rests on a 2018 Central Bureau of Statistics survey, and for the comparison of Arab and Jewish use of digital banking we could not find the survey year. We found no recent figures on cash use or on non-bank credit that passed our checks.

For marketers, that means assumptions about an “unbanked audience” or a “preference for cash” are hypotheses to test, not facts. You can test them in your own data if you break it down by interface language and region: app sign-up rates, use of budgeting features, and the topics customers contact you about.

What it means for marketers

The data points to an audience that runs a tight budget, wants tools to help, lacks information in specific areas, and relies on human guidance for one of its biggest financial decisions, the mortgage. These are the steps we would start with:

  • Sell control over money, not one more product. A spending and budgeting tool in full Arabic, with simple alerts and a clear monthly summary, meets a need most respondents said they have. Measure how many Arabic-speaking customers actually use it, not just how many downloaded the app.
  • Explain before you sell. Insurance, saving and dealing with the bank are the areas where respondents themselves said they lack knowledge. Short explanatory content in Arabic, designed with women and young people in mind as well, can open a conversation that a sales campaign will not.
  • Show the full price up front. Where pay is lower and margins are tight, fees, interest and repayment terms should appear in shekels and in Arabic from the very first offer. Test price points and payment terms with the audience rather than copying them from the general market.
  • Work with mortgage advisers, and choose them carefully. Most mortgages granted in Arab society since 2024 went through an adviser. Give advisers Arabic materials and transparent terms, and remember that in an unregulated field their quality is your reputation too.
  • Digital first, but not digital only. Paying online is already familiar to most Arab internet users, so the website and app must work in Arabic from end to end. Keep an easy way to talk to a person, and break the data down by region: in the Negev, use of online banking is lower.