Egypt: FRA issues regulations on digital transformation of non-bank financial sector
Source: Middle East Insurance Review | Aug 2023
The Financial Regulatory Authority (FRA) has issued decisions concerning the digital transformation of the non-banking financial sector in Egypt.
These regulations cover requirements relating to:
- equipment, technological infrastructure, information systems, means of protection and insurance
- establishing digital identity, digital contracts, and digital records
- the establishment of a registry to register outsource service providers
The regulations also deal with the conditions and procedures required for the incorporation, licensing, and approval of companies and entities wishing to engage in non-banking financial activities through FinTech.
For the insurance industry, the regulations pave the way for a technological breakthrough.
FRA chairman Mohamed Farid said that the package of executive decisions was to activate Law No. 5 of 2022 to regulate the use of financial technology and harness its potential to enhance the capabilities of the non-banking financial sector and achieve insurance, investment, and financing inclusion, according to a report in Daily News Egypt.
Mubasher Capital vice chairman Ehab Rashad said that the regulations are necessary at the present time, especially with artificial intelligence entering asset management activities.
Sympl platform co-founder Mohamed El-Feky said that the regulations will accelerate the pace of the spread of electronic platforms in Egypt, such as those dealing with digital identity. He said that technology programmes would help promote a financial culture among the public and provide more flexibility and ease of dealing.
He said that one of the most important challenges is to draft executive regulations with detailed details for each decision, as there must be detailed guiding rules to facilitate quick implementation.
The Insurance Federation of Egypt said that the regulations would lead to a set of effects, such as accelerating the pace of digital transformation, which is important in promoting financial inclusion. Digital technology helps insurers reach different segments of customers and facilitate the premium collection process, improve customer experience and cash flow for insurers while creating added value for customers through digitalising the compensation settlement process. M