Ayman Hussein — the Sub-Governor of the Central Bank of Egypt (CBE) for the Information Technology Sector — said that technology has become an essential part of our daily life and a necessity imposed by the requirements of present and future aspirations.
He made this statement during his participation in the first Al-Ahram Financial Technology Conference on Sunday in the presence of a large number of CBE officials and bank leaders.
Hussein explained that the CBE’s interest in digitising financial services comes in light of integration with the goals and vision of the National Payments Council headed by President Abdel Fattah Al-Sisi to transform into a cashless society.
He pointed out that one of the council’s most prominent achievements was establishing the ‘Meeza’ national payment system — the first local system of its kind that is independent and capable of providing the same services as foreign payment networks effectively and efficiently to spare the national economy the effects of these external networks for any emergency event.
“Financial technology has enabled us to transform challenges into opportunities, as the nCBE has directed banks to expand in providing more digital banking services, which enhanced the banking sector’s ability to overcome many obstacles and reach all segments of society. This had a great impact on enhancing the ability of the banking sector to respond quickly and flexibly to the requirements of the pandemic period, as more than 1bn electronic transactions worth EGP 2.8bn were executed last year,” Hussein said.
He added that in terms of its catalytic and supportive role for the financial technology industry, the CBE launched the fintech and innovation strategy in March 2019, which is in line with Egypt’s 2030 Vision for digital transformation and sustainable development, with the aim of transforming Egypt into a regional centre for fintech.
He explained that in this context, the CBE was interested in laying the necessary legislative and regulatory foundations to support and stimulate the targeted digital transformation by dedicating an entire chapter to payment systems and services and financial technology in the CBE and Banking System Law No. 194 of 2020.
The CBE is currently working in cooperation with the Financial Regulatory Authority (FRA) to issue a new law to set the legislative framework required to benefit from alternative financing services and financial technology activities related to banking services as well as expand their provision to meet the needs of various groups in the Egyptian market.
Hussein added that due to the fact that the CBE is well aware of the importance of human cadres in achieving the objectives of the financial technology strategy, it has been keen to support young talents and entrepreneurs in this important field and provide them with a supportive environment locally and globally.
He explained that over the past few years, several initiatives have been launched in this regard. For example, the initiative to integrate fintech projects into university students’ graduation projects — the ‘FinYology Initiative’ for youths — with the participation of more than 15 Egyptian and international universities as well as many banks operating in Egypt, and the launch of the Financial Technology Academy programme in cooperation with many bodies and entities — whether local or international.
He added that in integration with these efforts and to achieve the targeted digital transformation, the CBE launched the regulatory laboratory for innovative fintech applications as a disciplined testing environment that allows fintech entrepreneurs to test their innovative applications, taking into account the full rights of customers.
Hussein stressed that the CBE’s efforts to promote the fintech industry continue uninterrupted, as the ‘Fintech Egypt’ platform that was launched in 2019 and is affiliated with the CBE issued the ‘Finance Technology Perspective 2021 Report’, which is the first integrated report that monitors financial technology developments in the Egyptian market, as an initial step to provide an integrated vision for all parties to the fintech system in Egypt.
According to Hussein, the report revealed unprecedented growth in Egypt in the field of fintech and the sectors feeding it over the past few years. The volume of fintech investments increased from $1m in 2017 to $159m in 2021, and the number of emerging Fintech companies is significant, rising from just two companies in 2014 to 112 companies in more than 14 innovative Fintech sub-sectors in 2021.
He added that in parallel with this great development in fintech, Egypt witnessed a significant increase in payment tools during the last period, which would support the transition to a digital economy and a cashless society. The number of bank cards increased to about 54m, including 22m feature cards, more than 25m mobile wallets, 740,000 electronic points of sale, and more than 18,500 ATMs throughout the country.
Furthermore, Hussein said that the CBE is quite ambitious. This year will witness the launch of many important projects related to fintech, such as an instant payments network, which can represent an unprecedented boom in financial and banking transactions in the Egyptian market, as it will enable citizens to implement their financial transactions and bank transfers between various accounts in all banks instantly, 24/7, even on holidays and vacations.
He added that the Technology and Innovation Support Fund will also be launched with a capital of more than EGP 1.3bn with the participation of the National Bank of Egypt, Banque Misr, and Banque du Caire, in addition to the opening of the ‘Grid’ financial technology centre, which aims to strengthen and advance the fintech system within the Egyptian market and work to bring together all parties of the fintech system under one roof.
According to Hussein, there is also a plan to launch a system to identify customers electronically (EKYC), which will enable citizens to open bank accounts electronically without the need to go to banks’ headquarters or branches, in addition to expanding the establishment of digital banks that provide banking services through digital channels or platforms using modern technologies.
He stressed that securing banking transactions and cybersecurity represents a great challenge in light of the digital transformation and continuous technological development, explaining that securing banking transactions is a major priority within the CBE’s integrated vision for expansion in digital financial transactions.
Hussein pointed out that the efforts of the CBE in the areas of fintech, electronic payment systems, cybersecurity, and financial inclusion — with the support of efforts to spread financial culture and attention to youth, women, people with special needs, and the elderly — were clearly reflected in the increase in financial inclusion rates in Egypt, which amounted to 56.2% in December 2021. This contributes to improving the standard of living of individuals, reducing poverty, and promoting the goals of the state’s 2030 vision for sustainable development.
He also stressed that the role of the CBE is no longer limited to being supervisory. The bank now acts as a catalyst and supporter of the process of change, development, and innovation in relation to financial and banking services.
He explained that from this standpoint, the CBE is leading efforts to expand the use of fintech applications in the Egyptian banking market without sparing any effort, along with all parties of the banking sector and partners from relevant ministries, to achieve its future vision for digital transformation and the beginning of a new era of digital banking services in a manner that complies with the requirements of the “new republic”.