The Egyptian Financial Regulatory Authority reviewed the first-year results of FRA-Sandbox, the regulatory laboratory dedicated to fintech applications in non-bank financial activities, at the first annual FRA-Sandbox summit. During this period, the laboratory received 49 projects, 9 of which received preliminary approval, while 2 projects moved to the live-testing stage, according to the presentation delivered by engineer Ahmed Khalifa, the laboratory’s executive director.
The laboratory enables idea owners, entrepreneurs, and companies to test their technological solutions in a regulatory sandbox while receiving guidance on relevant laws and decisions before developing products or launching them on a broader scale. The authority said the laboratory also provided regulatory guidance to approximately 45 companies and organized workshops and seminars addressing cybersecurity and the legislative and regulatory frameworks for non-bank financial activities.
From Receiving Ideas to Live Testing
Khalifa explained that the size of an institution is not a preferential criterion for accepting a project. Instead, the evaluation process focuses on the idea’s ability to create a measurable impact and improve the customer experience. He also noted that the laboratory operates according to a clear timeline linking experimentation with the extraction of results, while moving toward more advanced stages of live testing for solutions before making them available on a broader scale in the market.
The trials discussed at the summit included applications in the insurance sector, including automated accident assessment and electronic policy issuance. The Minister of Investment and Foreign Trade also referred, in a recorded speech, to the importance of providing the necessary data and regulatory amendments so that startups can test and develop their solutions within an organized institutional framework.
Priority for Artificial Intelligence and Data
Mohamed El-Sayed, Vice Chairman of the Financial Regulatory Authority, said that projects using artificial intelligence and digital analytics tools accurately and securely would be among the support priorities within the laboratory. According to the issues raised at the summit, this is linked to the need to comply with personal data-protection rules and provide clear governance for services.
The discussions also addressed the use of alternative data and open banking transactions to develop creditworthiness assessments, particularly in financing small enterprises. Mostafa Ismail Hassan, CEO of the Micro, Small and Medium Enterprise Development Agency, affirmed the agency’s intention to refer more startups connected with this field to the laboratory.
What Is Changing in Practice?
The announced figures indicate that the laboratory has moved from being a channel for receiving ideas to a mechanism for screening and limited testing of solutions before they reach the market. However, the number of projects that entered live testing remains only 2 out of the 49 projects received. The next phase therefore remains critical for measuring these solutions’ ability to move from preliminary approval to scalable applications while preserving customer protection and market stability.
The summit, attended by more than 500 participants from government and private entities, universities, research centers, and investors, witnessed the signing of memoranda of understanding between the laboratory and StartUp Egypt, Enjaz, Mahran & Partners, and EGX for Consultancy to support promotion, awareness, and startups’ access to the laboratory. The recommendations also focused on the need for legislative flexibility in dealing with artificial intelligence, the risks of data collection, and the generation of indicators.