Financial technology in Egypt no longer operates outside a legal framework, but the speed at which digital products and services emerge places the regulatory system under continuous scrutiny. While new rules require legislative procedures, studies, and institutional coordination, a new digital financial model may emerge within just a few months.
This is the main idea presented by Counselor Ahmed Adly in his article, emphasizing that the question is no longer whether Egypt has fintech legislation, but whether this legislation and the regulatory authorities can keep pace with technological development without stifling innovation or weakening user protection.
From a Legislative Vacuum to Developing an Existing Framework
The author notes that Law No. 5 of 2022 on the regulation and development of the use of financial technology in non-banking financial activities represents an important milestone in building Egypt’s legal framework. It established rules for using technology to provide these services, along with regulatory and supervisory mechanisms suited to their nature.
The banking sector, meanwhile, is governed by the Central Bank and Banking System Law No. 194 of 2020, which covers matters related to digital banking services and payments within the jurisdiction of the Central Bank of Egypt. Accordingly, the problem does not lie in the absence of rules, according to the article, but rather in the need to develop and update them as business models change.
Adly believes that risk-based regulation may be more appropriate than applying uniform rules to all innovations. The level of risk varies from one service to another, as does the need for controls depending on the nature of the activity and its potential effects.
Allocation of Jurisdiction and User Protection
The Central Bank of Egypt is the central authority for regulating financial technology within the banking sector, given its jurisdiction over monetary and financial stability, the banking sector, and payment systems and services. In non-banking financial activities, the Financial Regulatory Authority plays a fundamental regulatory and supervisory role under Law No. 5 of 2022.
Clarity regarding jurisdictions has practical importance for innovators, as each project needs to know the relevant regulator, licensing requirements, compliance rules, and limits of legal liability. The author also links regulatory clarity to the market’s ability to attract investment, without considering the uncontrolled easing of oversight a solution in itself.
These issues become increasingly sensitive as reliance on data expands. In addition to sector-specific rules governing financial activity, fintech intersects with Personal Data Protection Law No. 151 of 2020. The challenge is not limited to preventing breaches; it also includes determining what data may be collected, the purposes for which it may be used, the possibility of sharing it, and the party responsible for its misuse.
Artificial Intelligence Expands the Legal Questions
The use of artificial intelligence adds a new layer of complexity, particularly when a financial institution relies on an algorithm to assess customers, detect fraud, or make a credit decision. The article raises questions about responsibility for errors and whether traditional rules concerning contracts, disclosure, and liability are sufficient.
From the author’s perspective, Egypt does not need a new law for every innovation, but rather a framework capable of being updated and based on proportionality between technology and risk, user protection, and ensuring fair competition. He also proposes using regulatory sandboxes to test new products within a regulated environment before commercial expansion, while adhering to existing jurisdictions and frameworks.
certi.news’s Perspective
What is actually changing, according to the information presented in the article, is the shift in the discussion from creating an initial legal framework to improving that framework’s ability to respond. This affects banks, non-banking financial services companies, innovators, and users, particularly as the use of data- and algorithm-based decisions expands.
However, the article remains the author’s analytical perspective and is not an announcement of a legislative amendment or a specific regulatory decision. Questions concerning the mechanisms for applying the existing regulation, the limits of responsibility for algorithmic decisions, and how the rules should be updated therefore remain open before the relevant Egyptian authorities.
By: Counselor Ahmed Adly, former Legal Adviser to the Government of the United Arab Emirates, and Founder and Chairman of Al-Adly and Associates.