الهيئة العامة للرقابة المالية

The conference included a session featuring FRA Chairman, Minister of Higher Education and Microsoft Egypt’s General Manager reviewing government’s policies and progress in digital transformation.

The conference drew high-level participation, including Ministers of Higher Education, Parliamentary Affairs, Political Communication, Supply and Internal Trade

Dr. Mohamed Farid – FRA Chairman:

• AI and fintech are crucial for Egypt’s economic development and global competitiveness.
• Fintech is capable of providing solutions to address urgent development challenges in all sectors.
• Egypt possesses a strong pool of innovators capable of leveraging and adapting fintech.
• FRA has taken bold steps to digitize non-bank financial transactions, thereby expanding the reach of these services.
• The Regulatory Sandbox for the non-banking financial sector is launching soon; we are actively seeking innovative ideas and solutions.
• Microsoft’s success shows how entrepreneurship can transform economies and societies and Egypt needs to foster this kind of innovation.

Dr. Mohamed Farid, FRA Chairman highlighted the digital transformation journey of Egypt’s non-bank financial sector at “Microsoft AI Tour”. This conference was part of Microsoft’s global tour focused on artificial intelligence, designed to explore the transformative potential of AI technologies.  The event brought together business leaders and technology experts from across the globe.  During his presentation, Dr. Farid provided a detailed account of FRA’s initiatives to accelerate digitization of non-bank financial transactions.

Dr. Farid emphasized that achieving meaningful financial inclusion required a robust legal and regulatory framework for the non-bank financial sector.  He explained that FRA prioritized establishing this framework as a foundation for digital transformation.  These efforts began in 2022 with the promulgation of Law No. 5 of 2022. This law specifically regulates the use of financial technology (FinTech) within non-bank financial activities.  Following the passage of Law No. 5, FRA issued Decree No. 58 of 2022.  This decree outlined specific conditions and procedures necessary for companies and entities seeking to establish, obtain licenses and receive approvals to conduct non-bank financial activities using FinTech.

Building upon these foundational legal and regulatory instruments, FRA issued Decree No. 139 of 2023 outlines the required technological infrastructure, information systems, and security mechanisms for FinTech use in non-banking financial activities.

During a panel discussion with Minister of Higher Education and Microsoft Egypt’s General Manager, Dr. Mohamed Farid, FRA Chairman underscored the critical role of AI and FinTech in Egypt’s economic development, emphasizing their potential to solve pressing challenges across all sectors. He highlighted Egypt’s wealth of innovative talent and the Authority’s bold reforms to digitize non-banking financial transactions, thereby broadening access to financial services. Dr. Farid also announced the imminent launch of a Regulatory Sandbox for the non-banking financial sector, inviting innovative solutions for improvement.  He cited Microsoft as a prime example of the transformative power of entrepreneurship and innovation, which Egypt desperately needs.

Dr. Farid also shed light on Decree No. 140 of 2023, the first regulatory decree of its kind in the financial sector. This decree addresses digital identity, digital contracts, digital registries, permitted uses of fintech in non-bank financial activities and necessary compliance measures. This in addition to Decree No. 141 of 2023 that establishes the Outsourcing Registry for FinTech companies providing outsourcing services, including E-KYC and E-contract records to financial institutions.

Then, FRA has issued Decree No. 57 of 2024, which establishes rules for regulating the operation of Robo-Advisors for Investment. This marks the first time such regulations have been introduced in Egypt. Dr. Farid explained that a Robo-Advisor is an electronic system that provides financial advice to clients for the purpose of creating, managing, and rebalancing an investment portfolio using AI algorithms.

These regulatory initiatives have led to the registration of four companies as Outsourcing Services Providers. These companies facilitate electronic identification, verification, and authentication; performs electronic Know Your Customer (e-KYC) processes; enables electronic contracting for non-banking financial products; and provides electronic record management services, including registration, storage and retrieval.

Dr. Farid underscored the transformative potential of FinTech and digitization of non-bank financial transactions, emphasizing their crucial role in expanding access to insurance, investment and financing opportunities. He affirmed that these advancements are essential for achieving financial inclusion and driving Egypt’s digital transformation agenda. Furthermore, he highlighted FinTech as a key enabler, simplifying access to non-bank financial services for all segments of society.

For his part, FRA Chairman emphasized the Authority’s commitment to govern digital transformation process, prioritizing data protection and safeguarding the rights of all stakeholders.  He stressed the critical importance of data and information security, particularly given the rapid growth and diversification of FinTech solutions. Recognizing this need, the Authority has accelerated the digitization of non-banking financial transactions, implementing measures to ensure secure and efficient digital processes.

Dr. Farid highlighted the launch of the Regulatory Sandbox, a pioneering initiative – the first of its kind in the non-bank financial sector – designed to support and foster emerging companies with innovative solutions and ideas in this field.

FRA Chairman underscored the Authority’s deep commitment to digital transformation and technology, recognizing their pivotal role in achieving financial inclusion objectives. He also emphasized the Authority’s growing reliance on regulatory and supervisory technology (SupTech) to enhance the stability and resilience of non-bank financial markets.

Dr. Farid stated that the Authority’s vision prioritizes fostering a supportive environment that enables companies’ growth and facilitates access to non-bank financial services.