Open banking in Egypt – Open Banking Nigeria

Egypt

Open Banking Model

Like many others, Egypt is taking a regulatory-led approach to open banking.

The Central Bank of Egypt (CBE) is leading the efforts to establish a formal regulatory framework to govern secure data sharing between banks, fintech companies, and other third-party service providers.

The CBE’s open banking initiatives are aligned with a larger National Digital Transformation Strategy, which aims to promote inclusion, increase competition, and encourage innovation in financial services.

Additionally, Egypt’s Data Protection Law (2020) ensures that all data sharing is secure and compliant with international data privacy standards, ensuring that consumers are protected in this new digital landscape.

The framework for open banking in Egypt is still under development, but it is expected to follow a regulatory-led approach similar to the models in countries like the UK, and Nigeria, focusing on consumer protection and data privacy.

The Central Bank

The Central Bank of Egypt (CBE) is the main regulatory body overseeing Egypt’s financial sector. The CBE’s leadership is critical in shaping the country’s open banking strategy and ensuring that the open banking ecosystem is safe and compliant with Egypt’s data protection laws.

As part of its strategy, the CBE has launched several initiatives aimed at promoting financial inclusion and digital payments, including InstaPay an app designed to facilitate real-time payments and transfers.

The CBE’s efforts are not limited to just open banking payments but extend to the broader open finance ecosystem, focusing on collaboration between banks, fintech companies, and other third-party providers to encourage innovation and competition. However, the specific regulations to govern open banking are still in the works.

Key Stakeholders in the Open Banking Journey

Several key players are involved in driving Egypt’s open banking journey:

Central bank of Egypt (CBE)

As the primary regulator, the CBE is responsible for setting the rules and guidelines for open banking. It oversees the development of Egypt’s open banking regulatory framework to ensure consumer protection and drive innovation.

Traditional Financial Institutions (API Providers): Major banks such as Banque Misr, National Bank of Egypt (NBE), and Commercial International Bank (CIB) are preparing to participate in open banking by developing their API infrastructures. These banks are key players in the ecosystem as they hold vast amounts of customer data that will be shared with third-party providers.

Fintech companies (API consumers)

Egypt’s fintech sector is growing rapidly, with companies like Fawry, valU, and PayMob actively looking to leverage open banking for digital innovation. Egypt’s fintechs are expected to play a crucial role in developing new financial services that cater to Egypt’s large unbanked population.

The Egyptian banks company

Created as a coalition of the Central Bank of Egypt, the Ministry of Finance, and several national banks, the EBC is currently creating formal regulations around open banking to incorporate into the central bank’s regulatory sandbox.

Current Status and Next Steps

At this time, Egypt is in the early stages of its open banking journey. The regulatory framework is still being developed, but significant progress has been made through initiatives like the InstaPay app and the Nclude Fund.

In 2020, Egypt passed its data protection law with a specific focus on customer consent.

In October 2021, the CBE introduced digitization regulations governing the country’s Instant Payments Network (IPN), allowing customers to make instant transfers and access multiple bank accounts through a single app.

At the first stage of Egypt’s Open Banking path, these digital payments were such an important milestone. According to Akram Abdou, Founder of Egypt-based Underlie Startup, “the next generation of banking in Egypt is an open-finance ecosystem”.

While open banking is not yet implemented, Egypt is actively working towards a regulatory framework that balances innovation with consumer protection.

Opportunities

Fintech Innovation: Open banking offers immense potential for Egypt’s growing fintech sector to innovate and develop new financial services, especially in digital payments, lending, and credit.
Financial Inclusion: With over 39 banks operating in Egypt, the integration of open APIs has the potential to fast-track financial inclusion, particularly for the unbanked population.
Partnerships Between Banks and Fintechs: The collaboration between banks and fintech companies, such as the launch of Nclude Fund and partnerships like MDI with Mastercard, will be a major enabler the growth and adoption of open banking.

Important Links