What Does Egypt's First Digital Bank Offer?

SadaNews Economy - The Central Bank of Egypt has approved the conversion of the Egypt Digital Innovation Company (MDI) into "One Bank," making it the first integrated digital bank in the country to offer all its services exclusively through digital channels.

The company was established in 2020 as part of initiatives in the financial technology sector, with funding and support from Bank Misr, the banking arm of the Central Bank of Egypt and the second largest government bank in the country.

Goals of the Digital Bank

"One Bank" aims to achieve goals that support Egypt's national strategy for transitioning to a digital economy, including the following:

Financial Inclusion: The bank targets groups that do not have adequate banking services or lack bank accounts.

Supporting the Digital Economy: To solidify the digital transformation of the national economy and offer smarter, more comprehensive, and seamless services.

Innovative Financial Solutions: To provide an innovative banking experience based on ease, security, and speed through digital platforms.

The official launch of the bank is scheduled for next year, to present a range of new banking services and products for individuals and businesses.

The Future of Digital Banking in Egypt

In this context, the Chairman of "One Bank," Engineer Khaled Al-Attar stated that the launch of Egypt's first integrated digital bank is a step towards solidifying the digital transformation of the Egyptian economy.

Al-Attar explained to Al-Jazeera Net that all financial transactions will be conducted through a comprehensive electronic application that allows clients to manage their accounts and funds easily, securely, and quickly, thus saving time and cost while ensuring a smoother banking experience.

Regarding data security and customer protection, he emphasized that the Egyptian experience in digital services reflects an advanced level in the field of cybersecurity, pointing to the success of platforms like "InstaPay" operated by the central bank, which are safely used by millions of Egyptians.

He added that "One Bank" will adhere to the same global standards for protecting customer data and funds in an integrated digital environment.

The Challenge of the First Digital Bank

Al-Attar observed that the most significant challenge in the first phase is to educate citizens about the concept of a digital bank, especially since any new service raises questions and concerns at its outset, citing the experience of banking cards three decades ago, which quickly became an essential part of Egyptians' lives.

The chairman expects that the youth will be the most inclined to open new digital accounts due to their close connection to technology and easy adaptation to innovative solutions, while it may take longer for older age groups.

Al-Attar did not rule out the possibility of establishing other digital banks in the Egyptian market after obtaining approvals from the central bank, confirming that the proliferation of digital banks enhances competition and stimulates the provision of more innovative and quality services for customers.

Financial Inclusion in Egypt

Egypt has witnessed a noticeable transformation in financial inclusion over the last decade, especially in the last three years, driven by the government's efforts to expand the base of financial sector participants and enhance innovation in payment systems and the digitization of various transactions.

This is part of the Financial Inclusion Strategy (2022-2025), which aims to empower various segments of society economically and facilitate their access to financial services.

According to official data, the number of citizens who own and use active accounts enabling them to conduct financial transactions, whether through banks, post offices, mobile wallets, or prepaid cards, is approximately 52 million out of a total of 69.6 million people aged (15 years and older).

It should be noted that financial inclusion indicators include not just owning accounts but their actual usage in managing funds and transactions.

Financial inclusion rates in Egypt rose to 74.8% by the end of 2024, compared to 70.7% at the end of 2023, but it remains below expectations.

The Central Bank of Egypt has worked to expand the base of beneficiaries by lowering the age for opening bank accounts to 15 years instead of 16 years, in line with the amendment of the age for issuing a national ID card, allowing young people to enter the formal financial system early.

Beneficiaries

Former Deputy Chairman of Bank Misr, Sahar Al-Damati, praised the move to launch the first integrated digital bank in Egypt, describing it as a necessary step to keep pace with the rapid developments in the digital age.

She clarified that the approval granted to the Egypt Digital Innovation Company, which is affiliated with Bank Misr, came after it fulfilled all regulatory and technical requirements that enable it to launch this new model of digital banks.

Sahar Al-Damati predicted in her conversation with Al-Jazeera Net that the Central Bank of Egypt will open the door in the future for the establishment of other digital banks, but it prioritizes banks that possess accumulated expertise, strong financial and technical capabilities, and advanced infrastructure, along with the necessary administrative and technological competencies.

The banking expert affirmed that these criteria are the real guarantee for the success of the new digital experience, achieving secure and efficient customer service and enhancing citizens' trust in this unconventional banking model.

Will Traditional Banks Disappear?

Regarding whether digital banks could replace traditional banks, Al-Damati ruled out the possibility in the short term, but acknowledged that it could happen in the future with the development of societal culture and increased reliance on digital services.

She indicated that a complete transition requires sufficient time for society to get accustomed to dealing with this new system comprehensively, especially concerning trust and security.

The spokesperson believed that digital banks might achieve rapid penetration among companies operating through digital platforms, such as real estate, tourism, and pharmaceutical sectors, as these activities inherently rely on technology and require quick and flexible banking solutions, which enhances the growth prospects of this type of bank in Egypt in the coming years.