Back to the complete issue
Sunday, 20 September 2020

Relaxed regs key to driving e-payments growth, says CIB boss

Relaxed regs are the key to driving e-payments growth, says CIB boss: The growth of digital accounts, such as mobile wallets, in Egypt will only be achieved through the continued deregulation of the system, CIB Chairman Hisham Ezz Al Arab said during a webinar hosted by the Institute of International Finance (IIF) on Thursday. According to Ezz Al Arab, the rate of uptake for new mobile wallets has soared over the past few months, during which regulations have been relaxed to encourage a shift away from cash transactions. One key change brought about by covid-19? Customers are currently not required to visit a bank branch in person with their national ID and sign a pile of paperwork, which has simplified the process immensely, Ezz Al Arab noted.

“People — not just the millennial generation — want a simple way to interact with their banks. They want a way to feel safe when performing transactions with their money,” Ezz Al Arab said, noting that relying on digital channels is the best way to achieve that sense of security, particularly as the banking sector has historically been the most trusted place for personal data storage. Another key feature of mobile banking channels is the low cost, he says. Small clients, who are traditionally “ignored” in favor of bigger players, tend to cost more to incorporate into the banking system than the profits they bring in, simply due to the paperwork involved.

Ezz Al Arab stressed that financial inclusion is not a gift, but rather a right for every citizen that the country should be able to afford efficiently and at a low cost. Mobile phones now provide the perfect channel to do so, particularly as the mobile penetration rate in Egypt is extremely high and reaches segments of the population that is typically unbanked, such as those who live in rural areas. “Devices are the solution for financial inclusion,” he said.

The small player is still not entirely incorporated: Ezz Al Arab also discussed the digital identity component of banking, saying that a person or business’ digital identity provides a holistic snapshot of the individual, including their behavior. On that note, he noted that banks are still lagging behind in understanding small businesses because banks typically handle these businesses in the same way they would a large corporate client, rather than by understanding the full identity. “Unless banks move their lending model from the traditional corporate lending to behavior-based lending, a small business will choose to access financing from a supplier or offtaker who understands them rather than a bank — even if the cost is higher,” Ezz Al Arab said.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.