For advancing the digital transformation of Egypt’s financial market, the Financial Regulatory Authority (FRA) has granted approval for three brokerage firms to utilize financial technology (FinTech) in their securities trading activities. This groundbreaking approval, which marks the first time such services are being offered in the country, has been granted to Tilda Securities, Beltone Securities, and Thndr Securities.
The Role of Financial Technology in Securities Trading
The use of FinTech by these brokerage firms will allow them to enhance their operations in several key areas, including client verification, authentication, digital contract signing, and the maintenance and retrieval of digital records. This shift towards a fully digital process is made possible through the partnership with two outsourcing companies, Vlens and Valify Solutions, both of which are registered in the FRA’s outsourcing provider registry.
- Tilda Securities and Beltone Securities will utilize Vlens to handle electronic client identification, verification, and authentication. They will also digitally sign contracts related to non-banking financial products and manage the digital storage and retrieval of these records.
- Thndr Securities will work with Valify Solutions for the electronic identification and verification processes and will handle the signing of non-banking financial product contracts and digital records through their own internal systems.
This initiative is part of a broader strategy by the FRA to streamline the securities trading process and make it more accessible, efficient, and secure for investors.
Accelerating Digital Transformation for Enhanced Investment Access
The FRA’s decision to approve these FinTech integrations aligns with its broader goal of accelerating the digital transformation of non-banking financial transactions. By promoting the use of technology in the financial sector, the FRA seeks to create an environment where more Egyptians can access capital market investment opportunities with ease.
One of the major benefits of this digital transformation is the ability to enable investors to open accounts and begin trading entirely online. This means no longer needing to visit physical branch offices or submit paper documents, which removes barriers and makes the investment process more seamless.
The integration of FinTech also supports financial inclusion efforts by making it easier for underserved groups, particularly youth and those previously excluded from the financial system, to access the market. The ability to complete transactions digitally will also streamline the process, reduce errors, and increase market efficiency, all of which contribute to greater investor confidence.
Strengthening Security and Data Protection
The FRA ensures the stability and security of the financial markets, which is why the companies must adhere to strict cybersecurity and data protection regulations. These measures ensure that investor data remains safe and that the digital systems used by the brokerage firms are resilient to threats.
To mitigate technological risks, the FRA requires all companies implementing FinTech solutions in non-banking financial services to adopt robust risk management frameworks and governance methodologies. This is essential for maintaining the integrity of the market and protecting the rights of investors.
A Shift Toward a Digital Future
The approval of these brokerage firms is part of the FRA’s ongoing efforts to modernize Egypt’s financial sector. The FRA has already authorized four companies to register as outsourcing service providers for FinTech in non-banking financial activities under the Financial Technology Regulation Law (Law No. 5 of 2022). These companies have begun contracting with over 80 financial institutions in the non-banking financial sector.
With the approval for securities brokers to integrate FinTech into their services, the FRA is helping to simplify the process for individuals looking to invest in the stock market. The introduction of digital account setup and trading options will encourage greater participation in the market, making it easier for ordinary citizens to invest and potentially benefit from the growth of the capital markets.
