The Central bank of Egypt reports that in the first half of 2022 the Egyptian Banking Industry has touched a remarkable net profit of EGP 56.868bn. With the deliberate adoption of strategies and policies, the finance sector of Egypt has seen a significant growth in recent years. Liberalisation of the forex system and the initiation of several investment projects has fueled the growth of the industry.
The Central Bank of Egypt claims that an increase of EGP 624bn has come from local banks alone other than that of the central bank, soaring from 9.413trn as of march 2022 to 10.037trn as of June 2022. CBE further elaborated that cash balances in banks added to EGP 76.532bn, balance of banks added to EGP 1.608 trn and the balances with banks abroad added to EGP 222.074 bn as of June 2022.
The Egyptian Banking sector is categorized into public, private and a joint venture summing up to 40 banks. The Central bank of Egypt governs the 40 banks industry with an exception for Arab National Bank, Nasr social bank and the national investment bank.
The Egyptian banking industry made its digital transformation ever since the events of the pandemic and the country is now witnessing a surge in contactless transactions, thoroughly modernizing the banking experience.
Riding the Digital Wave in Banking
Over the years, the Cairo based Abu Dhabi Islamic Bank (ADIB) Egypt, one of the leading financial service providers in Egypt, has made a momentous impact in the Egyptian banking sector with its innovative banking services and digital initiatives making the best use of modern technology for a pleasant banking experience.
Adding to ADIB Egypt’s technology use, the bank introduced a gadget called ‘Beat’, a device used for contactless transactions. The device can be worn around the wrist and brought closer to the POS terminals to initiate the transaction. This is one of the revolutionizing products introduced by ADIB Egypt.
Driving its digital transformation, the Egyptian bank partnered with SimpliFi in August 2022, a cards as service (CaaS) platform for the banking industry, driving the digitalization of payments for Egyptian Companies. Furthermore, ADIB Egypt reportedly seeks to introduce scheme-enabled prepaid cards for companies, collaborating with Simplifi’s CaaS platform. Building on digital solutions, the collaboration will make it possible for customers to manage their own card programmes and can have the cards issued independently.
Giving its customers an ideal banking experience, ADIB Egypt introduced a unique Shari’a compliant cashback card programme where every transacations are bound to credit cash back to its millions of card users.
Championing the 2030 Vision
ADIB has been a key driver in succeeding Egypt’s 2030 Vision based on the nation’s economic growth, it raised the capital to EGP 30m in January 2020 for its newly launched Abu Dhabi Islamic Consumer Finance (ADI-CF) with the aim to provide speedy financing services to its wide range of consumers in Egypt.
In September 2022, ADIB launched a salary advance product called ‘Yusr’ which enables customers to access up to 50% of their net salary before the designated day of the payday, which is based on the Murabha structure, furthering their aims to provide sharia compliant financial services. The procedure can be done using ADIB’s deliberately designed mobile app.
The president of the Egyptian Association for Islamic Finance has reported that Islamic Banking in Egypt produced a revenue of EGP 443bn as of June 2022, an increase in the growth rate of 13.5% (52.8bn) summing up from June 2021. ADIB Egypt secured second place touching a turnover of EGP 98.7bn, earning a share of 22.3%.
With the increase in tech integration, Egypt’s prepaid card market escalated a Compound Annual Growth Rate (CAGR) of 14.9% between the period of 2017 – 2021. Speculating the next four years, the figure is expected to see an increase of 16.2% by 2026 which is USD 5 billion from USD 2.75 billion as of 2022.
The US based Mastercard has been steadily broadening its reach in the Egyptian prepaid market. The American company further expanded its footprint in May 2021 signing a partnership with the Egyptian payment app Telda to introduce prepaid cards to Egyptian customers. The digital card needs no bank account and instant transactions on both ends is the fundamental feature of the app. The partnership between the Egypt headquartered fintech company Dopay and Bank ABC Egypt in August 2021 is one of the few notable collaborations for digital payroll solutions lately.
The Central Bank of Egypt has been instrumental in bringing digital fluency to the financial organizations across the country, not to mention its revolutionary introduction of contactless payments from mobile phones. Egyptian Banks have been teaming up with fintech companies to bring digital payroll solutions lately.
Blog By Harish Rajulu
