The Financial Rلإegulatory Authority (FRA), Dr. Mohamed Farid, shared Egypt’s digital transformation journey in the non-banking financial sector during his participation in Microsoft’s global AI conference. The conference aimed to explore the transformative potential of artificial intelligence technologies, and it brought together business leaders and technology experts from around the world. Dr. Farid detailed the FRA’s efforts to accelerate the digitization of non-banking financial transactions.
He emphasized that achieving financial inclusion without developing the legal and regulatory frameworks for the non-banking financial sector was impossible. The FRA completed the legislative framework for digital transformation starting in 2022, with the issuance of Law No. 5 of 2022, regulating the use of financial technology (fintech) in non-banking financial activities. This was followed by Decision No. 58 of 2022, which outlined the conditions and procedures required for establishing, licensing, and approving companies seeking to operate in non-banking financial services through fintech.
Furthermore, the FRA issued Decision No. 139 of 2023, addressing the necessary technological infrastructure, information systems, and security measures required for using fintech in non-banking financial activities.
During a discussion with Dr. Ayman Ashour, Minister of Higher Education, and General Manager of Microsoft Egypt, Mirna Aref, Dr. Farid affirmed that artificial intelligence and fintech are critical tools that should be harnessed to serve Egypt’s economic development and align with global trends. He noted that fintech is capable of offering solutions to address urgent developmental challenges across all sectors.
Dr. Farid highlighted Egypt’s abundance of innovative and creative minds, which are well-positioned to effectively apply and localize fintech technologies. He also pointed out that the FRA has implemented bold and ambitious reforms to digitize non-banking financial transactions, thus expanding the base of beneficiaries of non-banking financial services. He announced that the official launch of the regulatory sandbox for the non-banking financial sector is imminent and expressed openness to receiving innovative ideas and solutions to improve the sector. Additionally, he praised Microsoft as an example of the significant impact of entrepreneurship on economies and societies, stressing that Egypt needs such innovation.
The FRA also issued Decision No. 140 of 2023, regarding digital identity, digital contracts, digital registers, and the areas of fintech used in non-banking financial activities, alongside the compliance requirements. This decision represents the first regulatory measure issued by the supervisory authorities of financial sectors, detailing the requirements for electronic identification of clients.
Moreover, Decision No. 141 of 2023 was issued regarding outsourcing in fintech for non-banking financial activities. It sets the rules for companies providing electronic client identification services and digital contract management for financial companies operating in this domain.
The FRA later issued Decision No. 57 of 2024, which regulates the Robo-Advisor for Investment program for the first time in Egypt. This system offers automated financial advice to create and manage investment portfolios using artificial intelligence algorithms. Currently, four companies are offering outsourcing services registered with the FRA, including electronic client identification, contract signing for non-banking financial products, and the registration and retrieval of digital records.
Dr. Farid emphasized that the use of fintech and the digitization of non-banking financial transactions strengthen the sector’s ability to achieve insurance, investment, and financial inclusion. This supports Egypt’s vision for financial inclusion and digital transformation, with fintech serving as a key driver in facilitating access to non-banking financial services for all segments of society.
He also highlighted the FRA’s commitment to governance and data protection during the digital transformation process. With the growing use of various fintech tools, the FRA has been working to accelerate the digitization of non-banking financial transactions.
Additionally, Dr. Farid introduced the FRA’s regulatory sandbox, the first of its kind for the non-banking financial sector. This platform supports and nurtures startups with innovative solutions and ideas in non-banking financial services.
The FRA continues to prioritize digital transformation and technology as the foundation for achieving financial inclusion goals. It also leverages technology for regulatory supervision to enhance the stability of non-banking financial markets. The FRA will further participate in the Cairo International Technology Exhibition, conducting several workshops and discussions on digital transformation and financial literacy throughout the event’s three-day duration.
Dr. Farid concluded by noting that the FRA’s vision focuses on creating an environment conducive to the growth of companies and enabling individuals to easily access non-banking financial services.
