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These are the reasons for preparing the Law on the Use of Financial Technology in Non-Banking Activities


The Council of Ministers approved, during one of its meetings, last week, a draft law on organizing and developing the use of financial technology in non-banking financial activities, with the aim of enhancing financial inclusion, working to expand the base of beneficiaries of non-banking financial activities, raising their efficiency, and reducing the costs necessary to benefit From those activities and services, which raised questions about the importance of this law?

 

 

He says that in light of the remarkable development witnessed by the financial markets in the world in the use of technology in the financial sector in general and in the non-banking financial sector in particular with what is known as "FinTech", and the interest and competition of countries among themselves in reaching more advanced stages in adapting Technology in the service of financial transactions, it is no longer possible to wait and consider these successful experiences, which were able to make long-term strides in this field, and to reflect on the positive effects that called these countries to the high demand for the use of technology in their work, which comes on top of it. Facilitation, which is provided by the use of this technology in reaching the largest possible base of clients wishing to obtain financing, whether they are natural or legal persons, as well as increasing the efficiency of the implemented operations and reducing the cost of obtaining financing.

 

 

Omran added, and in Egypt, different fields of technology have begun to find a way in terms of providing financing activities, services and financial advice, whether in terms of legislative regulation or in what is practiced without having a clear legal framework that defines its features, as while the practical reality is witnessing maturity. Legislatively regulating some matters related to the use of modern technological means in the provision of non-banking financial services, including the issuance of the Financial Supervisory Authority in 2019 - for example - controls dealing with the microfinance product or what is known as "Nano Finance", which is one of the products. Micro-finance, which is a product that allows obtaining financing through modern technological applications, on the other hand, there are some models that work without having a legal framework.

 

 

He continued: “In an effort by the Financial Supervisory Authority to keep pace with the development in the use of modern and innovative technology fields in practicing non-banking financial activities, whether in the capital market, insurance, real estate financing, financing of medium, small and micro enterprises, financial leasing, factoring or financing. In addition to the new non-banking financial activities and services, especially in light of the existence of regulation for some of these matters as indicated above, it was considered that an integrated and comprehensive law be prepared to regulate and develop the use of financial technology in the practice of non-banking financial activities.

 

 

He pointed out that the Financial Supervisory Authority has been working during the last period to review the best international practices in force in this regard, and discussion sessions were held with some representatives of the entities working in financial technology and some experts, in order to exchange views and visions regarding the proposed legal regulation of the issue. The outcome of these efforts is to prepare the project, as a legal regulation aimed at enhancing the authority's use of modern and innovative technology as a supervisory authority over entities engaged in non-banking financial activities.

 

 

He stressed that the aim of the law is to facilitate the Financial Supervision Authority's supervisory role over the entities subject to it, with regard to adherence to standards of transparency and governance, protection of dealers in non-banking financial markets and the adoption of modern and innovative technological tools to facilitate dealing with the non-banking financial sector in the field of using financial technology, Towards a reflection of the Egyptian state’s adoption of a policy of providing a remote work environment that is mainly based on the secure exchange of information and supervising a censor that directs with the same ability to digital surveillance, especially in light of the generous spending on information technology in the Middle East and North Africa, which is estimated at about $ 160 billion and an increase. Of 2.5% for the year 2019.

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