- Mohamed Farid, FRA Chairman witnessed the launch of Khatwa Finance and signing of a cooperation protocol between e-Khales and Misr Life Insurance to digitize insurance process
Dr. Mohamed Farid, FRA Chairman:
- As fintech and digital finance accelerate, robust data protection is essential to maintain market integrity and protect consumers
- Fintech licenses will be granted exclusively to entities demonstrating robust data security measures to safeguard sensitive financial information
- By embracing digital innovation and closing the digital gap, the non-banking financial sector can drive economic growth and expand access to essential financial services
- Financial inclusion would not have been possible without a strong regulatory framework for the non-bank financial sector
- Four companies have been authorized to offer outsourcing services under the Authority’s regulatory framework
- Digital transformation enhances the competitiveness of the non-banking financial sector and promotes financial inclusion.
- Digital transformation is not merely about developing websites or applications; it is a journey that requires robust systems and infrastructure, with data protection at its core.
- The Authority’s vision prioritizes creating a supportive environment that enables businesses to grow and individuals to easily access non-bank financial services
Dr. Mohamed Farid, FRA Chairman engaged in an open dialogue with Engineer Ibrahim Sarhan , Chairman & CEO of e-finance , as part of the 28th edition of Cairo ICT. The event, themed “The Next Wave,” is ongoing until November 20.
Dr. Farid underscores the importance of safeguarding data in the age of fintech. He highlighted FRA’s proactive approach in accelerating the digitization of non-bank financial transactions, which is aligned with the implementation of Law No. 5 of 2022, aimed at regulating and developing the use of financial technology in non-bank financial activities.
He further stated that the Authority has mandated all companies seeking to leverage financial technology in non-bank financial services to implement robust mechanisms and methodologies for managing and governing technological risks. This is to ensure their continued operational efficiency and protect the rights of their customers, thereby contributing to financial stability. A key requirement is that companies must store their databases within Egypt to safeguard data and transaction integrity.
Responding to Engineer Sarhan’s inquiry about the impact of the Authority’s digital transformation efforts in the non-bank financial sector, Dr. Farid explained that these initiatives are built on a solid foundation. The positive impact is evident in various sectors, particularly the capital markets. The number of registered investors on the Egyptian Stock Exchange has notably increased due to the integration of financial technology into coding procedures.
He further added that achieving financial inclusion without developing the laws and regulations governing the non-bank financial sector would have been impossible. The Authority has completed the legislative framework for digital transformation efforts, which began in 2022 with the issuance of Law No. 5 of 2022 on regulating the use of fintech in non-bank financial activities. This was followed by FRA’s decree No. 58 of 2022 concerning the conditions and procedures required for the establishment , licensing and approvals granted to fintech companies. Subsequently, FRA issued Decree No. 139 of 2023 regarding the facilities and technological infrastructure, information systems, and protection and security mechanisms required for the use of Fintech in the non-banking financial sector. Followed by Decree no. 140 of 2023 regarding digital identity, digital contracts, digital records and compliance requirements. This is the first regulatory decree outlining eKYC (electronic Know Your Customer). Decree No. 141 of 2023 further defines the outsourcing registry for non-bank financial technology, specifying authorized companies for customer identification and electronic contract services.
The Authority then issued Decree No. 57 of 2024, introducing regulations for the Robo-Advisor for Investment, an AI-powered platform providing automated financial advice.
He noted that four companies are currently registered to provide outsourcing services such as Electronic Know Your Customer (eKYC) processes, digital identity verification and e-contracting for non-bank financial products. Dr. Farid highlighted that financial technology is crucial for achieving financial inclusion and digital transformation, enabling broader access to non-bank financial services.
Addressing service providers, FRA Chairman emphasized that while developing attractive and flexible user interfaces for their applications is important, it is merely the first step in a longer journey of service delivery. Sustained success requires a focus on customer retention and awareness-building efforts.
Dr. Farid highlighted that the Authority’s vision prioritizes creating an enabling environment that fosters business growth and facilitates easy access to non-bank financial services for individuals.
The session featured a presentation by Alaa Elzoheiry , Chairman of Insurance Federation of Egypt (IFE), detailing the cooperation protocol signed between the Federation and E-Finance Company under the auspices of FRA. This collaboration aims to leverage data to expand insurance coverage in the agricultural sector and introduce a wider range of insurance products in the future.
Following the session, Bassel Rahmy, CEO of MSMEDA, announced the finalization of the procedures for establishing Khatwa Finance, dedicated to financing small and micro enterprises. This company will collaborate with several major financial institutions in Egypt. This announcement comes in implementation of President Abdel Fattah El-Sisi’s directives to support industrial and productive projects and provide innovative financing services to youth and entrepreneurs. Notably, the company submitted its establishment application to the Authority three years ago.
On the other hand, Dr. Farid witnessed the signing of a cooperation protocol between e-Khales and Misr Life Insurance to digitize insurance process.
Last modified: November 19, 2024