Egypt institutes new digital ID checks on certain fintech transactions

In a move to strengthen the security and efficiency of Non-Banking Financial Services and Activities (NBFSA), Egypt’s Financial Regulatory Authority (FRA) has recently issued a series of significant decrees centred around the adoption of financial technology.

On July 11, 2023, the Egyptian RFA took a significant step by releasing three distinct decrees (Decrees No. 139, 140, and 141) to enforce Law No. 5 of 2022, they said in a press release. The latter, published last year, mandates the oversight and advancement of fintech employment within the non-banking financial industry.

Notably, Decree No. 140 has introduced the ‘Digital Identification Process’, mandating the use of biometrics in digital identity verification during fintech interactions with NBFSA entities. During this procedure, individuals must undergo verification through a combination of knowledge-based, possession-based, and biometric-based authentication, including facial recognition and fingerprint verification.

Decree No. 139 delineates the necessary provisions concerning technological infrastructure and information systems to facilitate the adoption and implementation of technology within the NBFSA. The primary objective of Decree No. 141 is to create the Outsourcing Registry, which targets companies involved in FinTech activities and providing outsourcing services.

The FRA’s aim to strengthen digital identity verification processes in the nation’s financial sector involves making biometrics mandatory, ensuring adequate infrastructure and registration for fintech service providers, all of which puts the country on course for their 2030 ‘Egypt Digitalization’ Strategy.