(MENAFN- Daily News Egypt) Mohamed Farid, Chairperson of the financial Regulatory Authority (FRA), and Ibrahim Sarhan, Chairperson of e-finance, have participated in a panel discussion at the 28th Cairo International exhibition for Communications and Information technology (Cairo ICT).
Farid said that the Authority accelerated the pace of digitizing non-banking financial transactions after it issued legislative and regulatory decisions in the implementation of Law No. 5 of 2022 regarding the regulation and development of the use of financial Technology in non-banking financial activities.
He added that the Authority has obligated all companies wishing to use financial technology in non-banking financial services to adopt mechanisms and methodologies for managing and governing technological risks to ensure they perform their work efficiently. He explained that the most important of these mechanisms is not using databases that are not actually present on Egyptian territory, as a means of ensuring the protection of this data and the stability of transactions.
Answering a question about the impact of the Authority's efforts to achieve development in the digital transformation processes of non-banking financial services, Farid said that this development was based on clear foundations. Consequently, its impact appeared significant in most sectors, such as the capital market.
He added that achieving financial inclusion without developing laws and regulatory decisions for the non-banking financial sector was not possible. The Authority completed the legislative framework for digital transformation efforts, which began in 2022 with the issuance of Law No. 5 of 2022. It aimed to regulate the use of financial technology in non-banking financial activities, followed by Resolution No. 58 of 2022 regarding the conditions and procedures required for the establishment, licensing and approval of companies and entities wishing to practice non-banking financial activities through financial technology technologies. Then, FRA issued Resolution No. 139 of 2023 regarding the equipment, technological infrastructure, information systems, and means of protection and insurance necessary. This was followed by Resolution No. 140 of 2023, regarding digital identity, digital contracts, digital registry, areas of use of financial technology to practice non-banking financial activities and compliance requirements, which is the first regulatory decision issued by financial sector regulatory authorities. It specified in detail the requirements for digital electronic identification of customers, in addition to Resolution No. 141 of 2023, regarding the outsourcing registry in the areas of financial technology to practice non-banking financial activities. These companies may provide customer identification services and contract records electronically to financial companies operating in the field.
The Authority also issued Resolution No. 57 of 2024 regarding the rules for regulating the work of the Robo-Advisor for Investment program for the first time in Egypt. It is an electronic system that issues financial consultations to form, manage and rebalance an investment portfolio for the client through artificial intelligence algorithms.
Farid added that there are currently four companies that provide outsourcing services and are registered in the Authority's special registry, carrying out electronic identification, investigation and authentication processes, electronic customer identification processes, concluding contracts for non-banking financial products electronically, and electronic registration, preservation and retrieval processes from digital records.
Farid stressed that financial technology and digitization of non-banking financial transactions enhance the capabilities of the non-banking financial sector. He added that financial technology is a major driver and incentive to facilitate access to and obtain non-banking financial services for all different segments of society.
Finally, Farid addressed service providers. He explained that relying on attractive and flexible external interfaces for their technological applications is a small part of a long journey to provide the service and is not the most important stage. It must be built upon by ensuring the continuity of attracting customers and increasing their awareness of the services provided.
Farid pointed out that FRA'spriorities is primarily focused on providing a favorable environment that helps companies grow and individuals access non-banking financial services easily and quickly.
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